Should you choose a high or low deductible?

Understanding your deductible and out-of-pocket cost is important when choosing a health care plan. The deductible is the amount of money you need to pay towards your health care before your insurance kicks in and begins to cover costs. Deductibles can range from just a few hundred dollars to several thousand dollars. There are even some plans that have no deductible worked in. Once you reach your deductible amount for the year, your insurance plan will require you to pay a co-payment or cost share amount until you reach our out-of-pocket maximum. Once that is met, your insurance company should cover your services at 100 percent.

A higher deductible plan usually referred to as ‘consumer-directed’ plans, mean you are responsible for a greater amount of your initial health care costs, saving the insurance company money. The benefit to you comes in lower monthly premiums. If you have a qualified high-deductible plan, you are also eligible for a Health Savings Account. These [HSA] accounts are set up with pre-tax dollars and allow you to draw from them for medical expenses.

High deductible plans can be a good option for people who do not have young children and are in generally good health.