If you always stay tuned on current news stories, then most probably you have heard rearing discussions on high deductible health plans. This type of health plan has been the subject of debates these days because of the low premiums it provides. Though this benefit seems like an attractive selling point, there are still other aspects you need to consider in order to determine if a high deductible health plan is a good option for you to take. Here are its pros and cons:
List of Pros of a High Deductible Health Plan
1. It is perfect for young people.
More often than not, young people are not concerned about the serious illnesses they might have and would only apply for health coverage when something happens unexpectedly. The probability of health expenses is much lower among the youth, and this group feels that a high deductible health plan would give them sufficient coverage. Moreover, it would allow them to save on medical costs in the long run.
2. It requires lower monthly payments.
One huge advantage you can gain from a high deductible health plan is the much lower monthly payment for medical coverage you have to pay. With this plan, your monthly premiums will be much more reasonable, and you can actually save back some of your money for the future in the event when you need to pay for your high deductible. Since this program was introduced in 2004, it has been a popular way for people to save money on health coverage.
List of Cons of a High Deductible Health Plan
1. Its premiums can rise.
Though a high deductible health plan comes with low premiums, its low monthly payments could increase over time. And when the payments go up, this program would no longer be beneficial for your medical expenses. So, it is important to know how its premium rates will rise before choosing such a plan.
2. It is not suitable for those having frequent health needs.
If you have a long-term health condition or recurring medical needs, this plan is definitely a bad choice for you. By using it, you will be obliged to comply with the high deductible often, with your own money used to pay for all the expenses. In this case, you might want to take out coverage with a lower deductible, lowering your payment obligation.
3. It can put you into financial difficulty.
With a high deductible health plan, you might find yourself exceeding your contribution limit per year if you have a health crisis. This has happened to families who had contributed to high deductible health plans, which led to loss from high post tax dollars. Nevertheless, this issue can be mitigated if your out-of-pocket maximum required would not exceed the limits held under the plan.
Deciding if a high deductible health plan is the best option of a medical coverage for you to take is surely difficult. There are many factors that you need to take into account, which means you should be fully aware of it. But with the pros and cons listed above, you should now have the knowledge to come up with a well-informed decision.