high deductible insurance plan Archives

Low Deductible Plan Vs. High Deductible Plan

low deductible vs high deductible plan text overlaying image of a scale with an up arrow on one side and a down arrow on the other with a piggy bank in the middle If you’re looking for a health insurance plan, you probably feel like you’ve had a lot of terminology to learn. Especially when it comes to the out-of-pocket costs that you’ll be responsible for with your plan. It’s true that there’s much more to plans than just monthly premiums. You’ll most likely have to think about copayments, coinsurance, and annual deductibles, as well. And it’s this last expense that we’re going to look at here. Your annual deductible is the amount that you will have to spend on covered medical expenses before your health insurance plan begins to pay its share.

And when it comes to deductibles, you actually have choices. You can choose a high-deductible health plan (HDHP) or a low-deductible health plan (LDHP). But what’s the difference between these types of plans? This article will guide you through the specifics of HDHPs and LDHPs. As well as how to determine which type of plan will serve your needs most effectively based on your needs.

High Deductible Health Plans

A high deductible health plan (also known as a HDHP). As the name implies, is a type of health insurance policy that has a higher annual deductible than other types of healthcare plans. This difference can even be in the four-figure range. Meaning that you will most likely have to pay thousands of dollars out-of-pocket for medical care before your plan will begin to cover any expenses.

With that being said, monthly premiums for these plans tend to be lower than for other plans. And you will still have routine preventive care covered in full before you meet your deductible. As with any ACA-approved plan. The actual deductible you will have if you choose a HDHP will vary depending on your plan and insurance company, but there is a minimum deductible amount for a plan to be considered a HDHP, which changes each year. For 2023, the minimum annual deductible for individuals is $1,500, while the minimum for families is $3,000.

Advantages of HDHPs

As mentioned above, if you choose a HDHP, you will have a plan with a high deductible. But lower monthly premiums. This means that if you know that you will most likely only use the plan for preventive care rather than more extensive medical treatment. You could save money by going with a HDHP.

Other than lower monthly premiums, there is one other big advantage to HDHPs. You can open a health savings account (HSA) in conjunction with a HDHP; in fact, in order to have an HSA, you must have a HDHP. HSAs can be a great way to help pay for your out-of-pocket medical expenses. They are tax-advantaged accounts that can be used to pay for qualified medical expenses that your plan doesn’t pay for. Such as acupuncture and dental expenses. Your contributions to your health savings account are not subject to income tax. And they can be used to reduce the overall cost of your high deductible.

Disadvantages of HDHPs

The high cost associated with these plans is the most significant and obvious disadvantage of HDHPs. If you have a higher deductible, it means that you are responsible for paying a greater portion of your healthcare costs out-of-pocket before your plan begins to contribute. This may put a significant dent in your financial resources. Particularly if you are forced to deal with unanticipated problems relating to your health.

Low Deductible Health Plans

One of the most significant differences between a HDHP and a LDHP is that a low deductible plan typically has a lower deductible. But a higher monthly premium payment.

Because of their lower deductibles, this type of plan is typically chosen by people who see their doctor more regularly. And who need more medical care. If this is the case for you, you might find that the higher amount you’re paying in monthly premiums is balanced out by the low deductible, since once you meet this lower amount, your insurance company will take care of your remaining costs. That could mean you’ll actually end up paying less out-of-pocket. In addition, LDHPs do not qualify for a health savings account (HSA), which is another difference between the two types of plans.

Advantages of LDHPs

Having a plan with a low deductible means you’ll have less to pay out-of-pocket if you need to access healthcare services more frequently, or if you have a true emergency or a catastrophic illness or injury, both of which can be very expensive. People who are older or who have a medical history that includes chronic conditions or illnesses may find that selecting a plan with a low deductible is the better option for them. Others who might benefit from this type of plan include:

Women who are pregnant or who have the intention of becoming pregnant
People who undergo a variety of specialized treatments or need expensive medications, such as those with cancer or on dialysis
Any individual who is contemplating undergoing a surgical procedure within the next year

Disadvantages of LDHPs

Plans with low deductibles tend to have higher monthly premiums, since insurance companies will only cover a greater percentage of your care if you pay a higher premium. These premiums can feel like a burden each month, and if you don’t end up using your plan as often as you thought you might, you could start to feel like you’re wasting money.

Who Should Choose a High Deductible Health Plan?

As we pointed out above, a HDHP might be a good choice for you if you are healthy and anticipate having few to no healthcare expenses. In these circumstances, the lower monthly premiums that you would be paying for your “just in case” plan (which will also cover your preventive care), would save you money over a more expensive plan.

In addition, if you can’t afford a low deductible health insurance plan, you can still get yourself at least some level of coverage with a HDHP. And it’s important to have a plan, even if it has a high deductible, because health insurers negotiate rates with providers. This means you will pay less overall for products and services related to your health if you have health insurance than if you do not have health insurance.

In addition, your high-deductible health plan (HDHP) will pay for necessary medical care, such as preventive services, if you purchase the plan on the individual market. But even if you have enough money to pay for a low deductible health plan, it may be worthwhile to consider a high deductible health insurance plan. Remember that if you have a high deductible health plan (HDHP), you can help to offset your out-of-pocket expenses with a health savings account (HSA).

Who Should Choose a Low Deductible Health Plan?

Again, a health insurance policy with a low deductible is likely to be beneficial to you if you are an older person, if you are not in good health, if you have a chronic condition. If you are planning to start a family, or if you simply make frequent use of your health benefits.

If you have costly health issues, purchasing a LDHP could save you money over the course of the year. Even with the higher premiums. If you switched to a HDHP, the amount you would save in premiums would be a much smaller fraction of the total amount you would pay in deductibles with your HDHP. And, frankly, many individuals find that it is simpler to pay a slightly higher amount on a monthly basis as opposed to a much larger sum all at once. Getting a low deductible health insurance plan might be the best choice for you if you don’t want to deal with the stress of potentially expensive medical care.

How to Choose

It is difficult to make a direct recommendation for a plan without knowing your unique financial situation and your health status. But we can offer the following advice to help you make a decision. Your best bet, though, is to speak to an EZ agent. Who can take your specific circumstances into account and find the best plan for you.

1.Look for discounts

You might be eligible for assistance with your monthly premiums or cost-sharing expenses, depending on your income. So, before you write off a type of plan as too expensive. Ask an EZ agent if you qualify for subsidies or tax rebates.

2.Narrow down your choices

Think about the maximum amount of money you are willing to spend each month on your premium and go from there.

3.Look at additional features

When it comes to shopping for health insurance, deductibles are just one of many factors to take into account. Consideration should also be given to the size of the plan’s network, out-of-pocket maximums, and the structure of the plan. As well as the types of costs that are covered. After you have made a comparison of your expected medical costs for the year with the coverage options available to you. Look more closely at the plans you are considering. Ensuring that they provide the appropriate type of coverage for the amount of money you anticipate spending on healthcare.

4.Set your priorities

Your choice between a high deductible plan and a low deductible plan may come down to what you value more. The ability to save money on premiums if you are fortunate enough to not have many medical expenses. Or the peace of mind that comes from knowing that you won’t have to pay a deductible if you do end up needing more medical care. Doing some number crunching before making your decision might make things simpler for you.

Let EZ Help You

Do you need assistance comparing different plans and choosing the one that is best for your budget and healthcare needs? EZ.Insure is here to help! We will connect you with one of our dedicated, highly trained agents. Who will discuss all of your options with you and assist you in selecting the insurance policy that meets your needs, all at no cost to you. That’s right, there are no hidden fees associated with any of our services. EZ.Insure makes the entire process simple, easy, and quick. To get started, simply enter your zip code in the bar below. Or you can speak to an agent by calling 877-670-3557.

What Is A Catastrophic Health Plan?

what is a catastrophic health plan? text overlaying image of a hand stacking building blocks with different health images on them Health insurance can seem like a big expense, but the cost of a plan is nothing compared to the cost of a significant medical issue. That means it’s important to have at least some sort of coverage – but what if you’re struggling to find a plan that you can afford?

In this case, you might want to look into catastrophic health insurance plans, which are designed to provide basic coverage for “just in case” scenarios, and which have affordable premiums. It’s important to note that these plans are not available to everyone, though. In order to purchase a catastrophic health plan, you must be under the age of 30 or meet the requirements for a “hardship” exemption.

Catastrophic plans are really only designed as last resort coverage, but they are a good option if you can’t afford another type of plan, because they will help you avoid a scenario in which you’re hit with a medical bill for thousands of dollars. The monthly premiums for these plans tend to be relatively low, but you will typically be required to pay for all of your healthcare expenses out-of-pocket until you reach the plan’s high annual deductible, which is typically at least a couple of thousand dollars.

Below is an explanation of how catastrophic coverage works, along with its benefits and associated costs, as well as a look at whether this type of plan might be right for you. Once you’ve read through the following, contact an EZ agent with any questions you might have, and to get quotes on the right plan for you.

What Do Catastrophic Health Plans Cover?

Catastrophic plans are like a financial safety net in case you end up incurring large medical bills that would be impossible to pay on your own. They also include coverage for the same preventive care benefits that all ACA-compliant plans offer. This includes coverage for the ACA’s 10 essential health benefits:

Ambulatory patient services
Emergency services
Hospitalization
Laboratory services
Mental health and substance use services
Pregnancy, maternity, and newborn care
Prescription medications
Preventative and wellness services and chronic disease management
Pediatric services
Rehabilitative and habilitative services

WIth a catastrophic plan, you will get most preventive care and up to three doctor visits a year fully covered. You will pay for most other covered services, like lab work and minor surgeries, out-of-pocket until you meet your plan’s high annual deductible. Once you meet your deductible, your catastrophic plan will pay for the rest of your essential health benefits for the rest of the year.

A catastrophic health plan has a deductible that is so high that most people don’t meet it in a given year. These plan’s deductibles are the same as the federally mandated out-of-pocket maximums for healthcare plans, which for 2023 is $9,100.

The good thing is, though, with a catastrophic health plan, as with all health insurance plans, the amount you pay out-of-pocket for medical services will actually be less than if you didn’t have an insurance plan. This is because insurance companies typically negotiate reduced rates with healthcare providers. So, it’s always better to have a plan – even one with a high deductible – than no plan at all.

What Isn’t Covered?

Because catastrophic plans have such high deductibles, they will most not likely not end up covering smaller medical expenses. Costs associated with medical services like treating a broken bone or minor illness, or seeing a specialist, will probably not meet your deductible, so your catastrophic plan will not begin covering your costs.

Who Are Catastrophic Plans For?

As mentioned above, these plans are only available to two categories of people. The first is young adults under 30 who don’t have other coverage options (such as through an employer or spouse). If you are in this category, you might consider getting one of these plans if you:

Are unlikely to need medical care throughout the year
Want to satisfy the legal requirements in your state for health insurance (if your state has a health insurance mandate) but don’t want to buy a more expensive plan
Want to have basic coverage in the event that something terrible does occur

Second, individuals 30 and over who qualify for what is known as “economic hardship,” and who don’t have access to healthcare through an employer or spouse, can also purchase catastrophic health plans. You may qualify for a hardship exemption if you:

Have experienced homelessness within the past three years
Were determined to be ineligible for Medicaid
Have experienced eviction
Have been the victim of domestic violence
Are filing for bankruptcy

If you believe that your current economic situation makes it difficult for you to pay for health insurance and are interested in a catastrophic plan, you’ll have to submit an application for a hardship exemption through the Health Insurance Marketplace.

It is important to keep in mind that even if your income puts you in a position to receive reduced healthcare costs, also known as a subsidy, you will not be able to put those savings toward a catastrophic health plan. This includes tax credits for premiums, as well as subsidies for cost-sharing. That means that no matter your income, your monthly premiums for your catastrophic insurance plan will remain the same.

The Cost

A catastrophic health plan is essentially the same thing as a high deductible health plan but with a different name, and with restrictions on who can purchase them, as already discussed. Because they have such high deductibles, they can be quite expensive if you have a number of health problems.

As of 2023, the annual deductible for individual catastrophic health plans is $9,100; for families, this doubles to $18,200. This means that you will most likely have to pay out-of-pocket for most smaller medical expenses, including lab work, minor surgery, or anything else other than preventive care.

The one good thing price-wise about these plans is that plans with high deductibles generally have relatively low premiums. So if you are healthy and don’t often see the doctor, the monthly cost might be worth it as coverage in case of an emergency, since a major medical event can be extremely expensive.

Pros of Catastrophic Health Plans

The following are some of the benefits of having a catastrophic health insurance plan:

In comparison to those of other types of health insurance, the monthly premiums are typically much more affordable.
Your coverage acts as a financial buffer, protecting you from the potentially catastrophic effects of a major illness or medical emergency.
If you are generally healthy and don’t require many medical services, you might find that your overall insurance and care costs are lower than they would be with either another plan or no plan at all.
Insurance companies typically negotiate lower rates for services with healthcare providers, so your out-of-pocket costs for care could be lower with a plan than they would be without one.

When determining whether or not a catastrophic plan is the best option for you, your current state of health is an important factor. If you are generally healthy, a catastrophic plan may be a good option. This is especially true if you have an emergency fund that can pay for any medical care you require up to the amount of your plan’s deductible.

Cons Of Catastrophic Health Plans

It’s important to note that catastrophic health insurance plans come with a number of significant drawbacks, including the following:

Because you will only be covered for preventative care, a limited number of visits to primary care providers, and the most expensive type of care, the benefits of your medical coverage will be severely limited.
Because your deductible will be very high, you will need to come up with a significant amount of money in the event that you require medical services, which can be a problem for a lot of people.
You will not be eligible for premium assistance through the Affordable Care Act (ACA).
You will not be able to open a health savings account (HSA), as you would be able to do with other qualified high-deductible health plans. With a health savings account (HSA), you can set aside money before it is taxed to use for medical expenses.

A catastrophic plan is not the best option for you if you are planning to have a baby or otherwise anticipate needing a significant amount of medical care during the course of the year.

Are Catastrophic Health Plans Worth It?

A catastrophic health insurance policy could be beneficial to have if you cannot obtain health insurance from another source. In this case, one of these plans will typically be the most cost-effective option, and it may be significantly less expensive than other available choices, such as COBRA coverage. A lot of people use this type of plan as a short-term solution for their emergency insurance needs.

It is most likely worthwhile to purchase a catastrophic insurance policy, since they have low premiums. Having one will protect you from incurring potentially bankrupting medical expenses in the event of an emergency or illness.

Working With EZ

If you find yourself in a bind, EZ.Insure is here to assist you. Our agents are incredibly knowledgeable. They can comb through all of the health insurance plans available in your area to find the right one for you. As quickly as possible and with no hassle to you. A personal agent will assist you in navigating the numerous coverage tiers and plan options available, and answer all of your questions. And the best part is that everything we do is totally free! To get your free quotes, simply enter your zip code into the space below. Or give us a call at 877-670-3557.

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Low Deductible Plan Vs. High Deductible Plan

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High Deductible Health Plans

Advantages of HDHPs

Disadvantages of HDHPs

Low Deductible Health Plans

Advantages of LDHPs

Disadvantages of LDHPs

Find Health Insurance Plans In 3 Easy Steps

Who Should Choose a High Deductible Health Plan?

Who Should Choose a Low Deductible Health Plan?

How to Choose

1.Look for discounts

2.Narrow down your choices

3.Look at additional features

4.Set your priorities

Let EZ Help You

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What Is A Catastrophic Health Plan?

Compare Health Plans Online

What Do Catastrophic Health Plans Cover?

What Isn’t Covered?

Find Health Insurance Plans In 3 Easy Steps

Who Are Catastrophic Plans For?

The Cost

Pros of Catastrophic Health Plans

Cons Of Catastrophic Health Plans

Are Catastrophic Health Plans Worth It?

Working With EZ

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