Deductible vs premium vs copay10/13/2023 ![]() Readers, has your employer forced you to choose between high premium and high deductible plans? What was your choice – and why? It’s always hard to plan for the unexpected, but if you put your savings into something like Aurora Bank and only use it during emergencies, you can take your best guess and learn from your mistakes. On one hand, if you’re young, healthy, and single, a high deductible plan may make sense after all, what are the chances that you’ll wind up in the hospital for an extended stay or require major surgery? On the other hand, a plan with higher premiums – and a lower deductible – may be better suited for a woman of childbearing age, who will most likely max out her deductible during the course of a pregnancy.īut, just as with any gamble, you can’t necessarily predict the outcome. Which Is Right For You?ĭeciding between a high premium and a high deductible plan is a lot like gambling. On top of that, plans with a high deductible often come with a higher out-of-pocket max as well, sometimes as high as $10,000 a year for a family insurance plan. That Kaiser Family Foundation study determined that the average deductible on these consumer-driven plans was nearly double that of traditional health insurance. While a high deductible plan and its subsequent lower premiums can put more money in your pocket, as well as your employer’s pocket, right now, it isn’t always the best choice. Termed “consumer-driven” health insurance plans, businesses including Wells Fargo, General Electric, and American Express have all forced workers to switch to a high deductible plan or, at the very least, choose between one of two high deductible options. More and more employers are switching to health care plans with lower premiums and higher deductibles as a way to reduce the company’s financial burden. The Bureau of Labor Statistics reports that in 2008, private sector companies paid as much as 71 percent of family health insurance premiums public sector employers ponied up even more – up to 73 percent. With most employer-sponsored health care plans, your company pays a hefty dose of premiums. However, it’s unlikely you’ll pay that full amount. By comparison, you could buy a brand-new 2012 version of my Hyundai Elantra for the same price. High Premium/Low Deductible PlansĪ 2011 study by the Kaiser Family Foundation found that American families are increasingly paying more and more out of pocket for their health care costs – a whopping $15,073 for a family health insurance plan. But such a simple approach to either situation is short-sighted. It helped that my biweekly contributions to my old plan totaled nearly $1,500 (for an HMO!), so I treated it like I was saving money AND getting a better product.įrom others I spoke to about it, those who initially lean toward higher insurance premiums are usually looking to save money in the long run, while those who originally gravitate to the higher deductible plans are looking to put more money in their pockets right now. I hate the hassle of HMOs and I’m a pretty healthy person, so you can guess what I did. Last month, I had to make this choice with my employer: Go with a free HMO, or go with a $1,000 deductible PPO plan. And with many employers looking for ways to cut costs, it’s one you may be facing sooner rather than later: whether to increase your monthly health insurance premiums or to pay a higher deductible. It’s the ultimate insurance debate, just as timeless as the old adage about the chicken and the egg.
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