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 plan’s 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?
A high-deductible health insurance plan is a specific type of major medical insurance—as with all major medical insurance, high-deductible health insurance is compliant with the Affordable Care Act.
As it pertains to HSA eligibility, the IRS defines a high-deductible health insurance plan as any plan with a deductible of at least:
|2018 Calendar Year1||2019 Calendar Year2|
Furthermore, a high-deductible health insurance plan may not exceed annual out-of-pocket expenses (e.g., deductibles, copayments) as follows:
|2018 Calendar Year3||2019 Calendar Year4|
The amounts listed above are adjusted annually for inflation, as needed.
What is the average health insurance deductible?
According to a Kaiser Family Foundation analysis of states that use HealthCare.gov, the average health insurance deductible for 2018 individual major medical insurance with combined medical and prescription drug deductibles was as follows5:
|Metal Level||Average 2018 Deductible (HealthCare.gov)|
Why are health insurance deductibles so high?
What is high or expensive, or low and affordable, is subjective and varies from person to person. But one important thing for anyone 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.6
The basic 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, most health insurance these days is considered high-deductible health insurance. However, normal doesn’t necessarily translate into affordable. Forty-three percent of adults with health insurance say they have difficulty affording their deductible.7
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.8 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, what are your options when you can’t afford your deductible?
If you can’t afford your health insurance deductible, here are a couple of things that might help with out-of-pocket expenses if you are eligible.
Gap benefits + additional coverage
You might consider buying supplemental coverage and add-on products to help with out-of-pocket medical expenses.
It may seem counterintuitive to purchase additional benefits as a way to save money; however, supplemental plans such as medical gap and add-on products such as hospital indemnity and telemedicine can help you limit your out-of-pocket healthcare expenses.
Medical gap plans are supplemental insurance that provides lump-sum payments when a covered accident or illness occurs. Use your benefits to pay your health insurance deductible, medical expenses, household expenses and more—you decide.
Hospital indemnity insurance is fixed-benefit indemnity coverage that can help with expenses related to hospitalization, surgery and critical illness. These policies provide specified, fixed-dollar amounts for covered hospital services and durations.
A telemedicine package provides you with virtual access to 24/7 telehealth services, anywhere you’ve got mobile or Internet connectivity. Board-certified doctors can remotely treat minor ailments such as cold, flu, ear infections, urinary tract infections, and more for just a few dollars per consultation.
An Rx discount card can help reduce what you pay out of pocket for prescription drugs. It’s simple to use: You present it at a participating pharmacy to access your discount.
In addition to premium tax credits that can reduce what you pay for coverage each month, you may qualify for cost-sharing reductions that help lessen your medical expenses beyond premium, including your deductible, coinsurance, copayment and out-of-pocket limit.9
Only silver plans purchased through HealthCare.gov or a state-based health insurance exchange are eligible for cost-sharing reductions. Your eligibility is also based on income.
If your job-based health insurance has a high deductible, you may want to ask your employer about group gap plans that help with out-of-pocket medical expenses.
Summary + next steps
Now that you’ve gathered some basic information about high-deductible health insurance plans and what to do if you can’t afford your deductible, you may want to speak with a health insurance producer who can help you select the right coverage.
Call 866-278-1464 for immediate assistance.
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