Navigating Health Plan Deductibles: A Guide to Choosing Wisely
Health Insurance can sometimes feel like walking through a maze and deductibles are often the first puzzle you must solve. But fear not, understanding deductibles is simpler than you might think and choosing the right one can save you headaches and money.
What is a deductible anyway? Think of a deductible as the entrance fee to your health insurance party. It is the amount you pay out of your own pocket before your insurance starts chipping in. For example, if your deductible is $2,000 then you’ll cover the first $2,000 of your medical bills before your insurance steps in to help.
You might think that a lower deductible is best because it means your insurance plan pays out more quickly but that isn’t always the best option for everyone. Low deductible plans often come with higher monthly premiums. On the other hand, high deductible plans have lower monthly premiums.
When choosing a deductible you will need to think about your health needs; are you a frequent flyer at the doctor’s office or a rare visitor. In addition, consider your wallet; do you have a lot of disposable income and savings or are you in a phase of life where you’re still building wealth? Think about your personal risk aversion; lower deductible plans offer peace of mind while high deductible plans are a bit riskier but could save you in the long run. And, finally, you will want to think about the perks and benefits of your plan; do you have a Health Savings Account, does your employer contribute more to one plan over the other, etc…
Consider looking at your past medical bills and healthcare needs. Use these benchmarks to help predict the type of care you might need in the coming year. Of course, past medical needs cannot predict future use, but it can give you a place to start. Compare and contrast the plans offered to you and plan for the worst but hope for the best.
Choosing the right health plan deductible doesn’t have to be scary. Keep calm and think about your needs, and when in doubt don’t be afraid to consult with an insurance professional.