High-deductible health plans (HDHP) are attractive because they seemingly reduce your health care spending, but that’s not always the case.
With a low-deductible plan, you’ll have predictable medical expenses and typically better coverage, but also higher monthly premiums. Turning to a plan with a lower premium and a higher deductible could be a good way to lower expenses if you can afford a deductible of $5,000 or more.
Choose a plan with a health savings account (HSA). The federal government allows consumers to contribute to their HSA before taxes are deducted from their wages, so you save money while creating a health care nest egg.
Is it right for you?
A high-deductible plan might be right if you:
- Are healthy and don’t get sick or injured very often.
- Can afford to pay the full deductible out of pocket, or at least within the 30 or so days you’ll have to pay your medical bills.
- Can contribute to an HSA, so you have the full deductible amount available from this account.
When a high-deductible plan might be the wrong choice
A high-deductible plan may not be right for you if you meet any of these conditions:
- You are pregnant or plan to become pregnant soon.
- You have small children.
- You have a chronic illness.
- You visit the doctor often.
- You are older than 65.
- You are planning on having a large procedure, such as a hip replacement.
- You take several medications or an expensive drug.
- Your children play sports and are at high risk for an injury.
You’ll also need to be proactive about your health with an HDHP. If you need treatment, explore all the options.
High-deductible health plans require discipline
Manage your out-of-pocket expenses carefully, and make sure you stay on top of medical bill payments.
If you aren’t able to be disciplined about saving for health care costs, you could end up in a financially devastating situation. With lower premiums, you won’t be saddled with a higher monthly health insurance payment.
The bottom line
With a high-deductible health care plan, you put a lot at risk if you become sick or get injured.
There’s no way to plan for these things. You’ll have to be at-the-ready to deal with higher copayments, hospitalization cost caps and other out-of-pocket expenses.
In addition, people with HDHPs often forego preventive care, services that usually are not included in these kinds of plans. The more you avoid preventive doctor visits and tests, the more likely you will be to become ill down the road.
UROne Benefits™ can help you weigh the pros and cons of a high-deductible health plan and find the right plan for your needs and your wallet. Contact us here or at 800-722-7331.
This post was originally published in April 2019; updated April 2024.