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Deductible Dilemmas

Deductible Dilemmas

What is a High Deductible Health Plan? Why are They So Common? What If I Can’t Afford Mine?

Health insurance premium and deductible amounts—they’re the numbers you probably look at first when shopping for coverage. What will you pay each month? How much will you pay out of pocket before your benefits fully take effect?

Premiums are pretty straightforward. Deductibles, on the other hand tend to throw us for a loop. What are they? How do they work? You can learn the basics in our Deductible 101 piece. And then, there are high deductible health plans (HDHPs). Common though they may be, they are often a source of concern. Let’s take a deeper look at HDHPs and how to navigate your healthcare costs when you have one.

What is a high deductible health plan?

In 2017, the IRS defines a high deductible health plan as any plan with a deductible of at least[1]:

  • $1,300 for an individual
  • $2,600 for a family

Annual out-of-pocket expenses (e.g., deductibles, copayments) for HDHPs in 2017 do not exceed[2]:

  • $6,550 for self-only coverage
  • $13,100 for family coverage

In 2017, the average deductible for the lowest-cost Obamacare plans is more than $6,000 for individual coverage and $12,393 for a family.[3] Deductibles for silver plans, which are the second-least-expensive, average $3,572 for individuals and $7,474 for families.

Why are health insurance deductibles so high?

One important thing to understand about health insurance costs is that lower premiums generally translate into higher plan deductibles and vice versa. In other words, if you opt for the least expensive monthly payment, you are likely to have the highest annual deductible. This can be financially savvy if you are a healthy individual who typically doesn’t go to the doctor. It can be financially straining if you have a chronic or unexpected health condition. 

Healthcare economics are a complex matter, which makes the reason for rising deductibles difficult to pinpoint. A Consumer Reports analysis of the issue offers one explanation: the movement toward consumer-directed healthcare.[4] Basically, the philosophy is that when we share more of our medical costs, then we make more cost-effective decisions about healthcare and drive down overall medical bills. Research finds that the opposite is true: people postpone care and end up getting sicker and accruing larger medical bills as a result.

What if I can’t afford my deductible?

As the numbers below will reveal, a majority of health insurance plans are high deductible health plans these days. However, normal doesn’t necessarily translate into affordable. Forty-three percent of adults with health insurance say they have difficulty affording their deductible.[5]

A 2017 Kaiser Health Tracking poll found that due to costs 27 percent of Americans say they have postponed care, 23 percent skipped a recommended medical test or treatment, and 21 percent did not fill a prescription for medication.[6] Nearly half of Americans say that paying a surprise medical bill of $500 would prove difficult—1 in 5 say they would not be able to pay it all together.

So, other than crowdfunding your medical bills, what are your options when you can’t afford your deductible? Consider buying supplemental coverage!

It may seem counterintuitive to purchase additional benefits as a way to save money; however, supplemental plans such as medical gap, hospital indemnity and telemedicine can help you pay out-of-pocket healthcare expenses.

 

Get deductible help with Metal Gap

 

Lower hospital bills with CAP

 

Access affordable care anywhere with Telemedicine

 

You can call the number at the top of your screen to discuss these and other options with a certified advisor from healthedeals.com.

 

Want to shop local?

Use Agent Finder

 

Looking for more ideas? Listen to our podcast interview about preventing situations in which you can’t afford your health insurance and read more about paying for unexpected healthcare

 

 

 

 


Legal Disclaimers

[1] Internal Revenue Service. 26 CFR 601.602: Tax Forms and Instructions. Rev. Proc. 2016-28. https://www.irs.gov/pub/irs-drop/rp-16-28.pdf

[2] Ibid.

[3] Mangan, Dan. “Obamacare Deductibles are on the Rise for 2017, Along with Monthly Premiums.” CNBC. Oc. 26, 2016. http://www.cnbc.com/2016/10/26/obamacare-deductibles-are-on-the-rise-for-2017-along-with-monthly-premiums.html

[4] Rosato, Donna. “How to Survive a High-Deductible Health Plan.” Consumer Reports. Nov. 17, 2016. http://www.consumerreports.org/health-insurance/high-deductible-health-plan/

[5] DiJulio, Bianca, et al. “Data Note: Americans’ Challenges with Health Care Costs.” The Henry J. Kaiser Family Foundation. March 2, 2017. http://www.kff.org/health-costs/poll-finding/data-note-americans-challenges-with-health-care-costs/

[6] Ibid.