Health Insurance Deductibles Can Lower Premiums

A deductible is what you need to pay before the insurance company will start to pay its portion of costs for a covered health expense. The deductible could range anywhere from a few hundred dollars or as high as several thousand dollars.

Generally, if you are very healthy, then you don't expect to see a doctor often or be on much medication, Then you can go for high deductibles which will keep your premium low.

If on the other hand, one has a chronic health problem, then it is better to go for high premiums and lower deductibles so that your insurance kicks in sooner.

The insurance company takes the health insurance deductibles into consideration when determining the premium for the coverage. The higher the premium, the lower the deductible.

Most companies have different health insurance deductibles for different types of health insurance coverage. For example, deductibles for a hospital visit might be $1,000 but for prescription medicine, it may be $250.

Here is an example of how deductibles work. If you had a medical bill of $450 and your deductible is $500, then you pay the full amount yourself, since it is less than the deductible. Only after you have paid the deductible amount will the health plan begin to cover your medical expenses.

Deductibles may not apply for all the services depending on the terms of your plan.

You may opt for a high-deductible plan as the premium will be lower. If you remain healthy the whole year, this is good for you. But, if any accident or illness were to happen, you might incur thousands of dollars. It is advisable to couple this option with health savings account (HSA), which can be used to help pay the deductibles.

If HSA is offered by your employer as part of the benefits package, then a certain amount is deducted from your paycheck each period and put into your account. Those medical expenses not paid by your health plan can then be paid from the money in HSA. HSA contributions are tax-deductible.

Written by Reina Raine
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