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Rethinking High Deductible, Low Premium Health Plans

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Many Americans with individual or family health insurance coverage have opted for a high-deductible plan. Basically, these are insurance policies that charge lower monthly premiums than traditional plans because the individuals insured are responsible for paying up to $5,000 or even more in medical bills before their insurance benefits kick in. This type of policy is commonly referred to as “catastrophic coverage.”

The majority of people who buy catastrophic coverage are healthy young adults or adults between the ages of 50 and 65 who can afford routine medical upkeep but do not want an unexpected health crisis to ruin their finances. Before deciding on a high-deductible health insurance plan, consider all the angles.

Advantages

  • Very low monthly premiums. This is by far the most attractive aspect of a high-deductible plan.
  • Financially savvy individuals can pair a high deductible plan with a Health Savings Account and save funds for health care services.
  • Under health care reform, these plans must cover 100 percent of preventative care with no deductible needing to be met first.

Disadvantages

  • In the unfortunate event that you should need to use your catastrophic coverage, the insurance company will not pay a dime until you have met your high deductible. If you do not have the thousands of dollars to pay the deductible, you will find yourself in a difficult bind. A Health Savings Account could help you prepare for this.
  • Having to pay out-of-pocket for doctor visits increases the likelihood that you will choose not to seek medical attention for minor ailments. Seemingly small health problems can become major ones if gone untreated.
  • Until 2014 when health care reform fully kicks in, high-deductible plans can still set a benefit cap of $1 million to $5 million. If you find yourself with multiple major health issues or chronic illness, this cap could possibly be met, leaving you responsible for all expenses afterward.

To become as well-versed as possible and make the proper health insurance policy choice, speak with a knowledgeable health insurance agent. They can ask the right questions about your personal situation and steer you in the best direction to meet your needs.

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