Pros and Cons of High Deductible Health Plan


Deductible health plans are making headlines today, and in case you do not know what these offerings are, they are a new coverage that has become so popular because of the low premiums they provide. Though what they include may seem a very enticing selling point, they also come with significant drawbacks that should be considered. Here are the pros and cons of this type of health plan that you need to look into to decide whether it is good for you or not:

List of Pros of a High Deductible Health Plan

1. It requires lower monthly payments.
One huge advantage that this health plan offers is the ability to pay lower payments on a monthly basis for medical coverage, which means that your premiums will be much more reasonable, allowing you to save back some of your finances in case you need to pay for the plan. Since being introduced in 2004, this type of health plan has become a popular way to save money on a monthly basis on health insurance. It basically reduces monthly medical costs.

2. It is suitable for young people.
This plan is considered as perfect for most young people, given that they do not deal with major medical conditions and would only take out insurance when something unexpected were to happen. As the probability of a medical expense is much lower for them, they would feel that this type of plan will provide them with adequate coverage, while allowing themselves to save on medical expenses in the long run.

3. It offers lower prices.
If you are in good health and just seeing your doctor for routine health issues, then you will be able to receive the medical care you need at a reasonable price. As check-ups would often have low co-pays in this type of plan, you can anticipate lower health costs over time, saving you a substantial amount of money.

List of Cons of a High Deductible Health Plan

1. It is not good for those with frequent health needs.
If you have a long-term health condition or frequent medical needs, this type of plan is not the best option for you. With it, you will constantly be meeting the high deductible and essentially be paying with your own money all of the medical expenses. Basically, you should have a coverage with a lower deductible, reducing your payment obligations.

2. It can cause premiums to rise.
Though low premiums are a huge selling point of this type of plan, low monthly payments would rise over time. As this goes on, it is no longer beneficial to be responsible for such deductible on your health expenses. It is essential to know how the premium rates would increase before choosing this type of plan.

3. It can lead you to a financial cliff.
With this type of plan, you might find yourself exceeding your yearly contribution limit, particularly when you are experiencing a health crisis. However, this issue can be mitigated if your out-of-pocket maximum does not exceed the limits under such a plan.

Considering the pros and cons listed above, do you think that a high deductible plan is good for you, or not?