The Pros and Cons of High-deductible Health Plans

Health insurance may make all the difference during difficult times. Whether you and your family seek preventive care to maintain your health and wellness or require medical attention to address injuries and illnesses, the right coverage is critical. However, while you likely understand the importance of health insurance, making sense of the various plan options and their respective capabilities can be difficult. Montero & Brage Insurance LLC is here to help you understand your options, including high-deductible health plans (HDHPs).

What Are HDHPs?

As their name suggests, HDHPs are a type of health insurance policy that typically includes a relatively high deductible. Your deductible establishes a minimum amount you’ll need to pay in a single plan year for covered services before your carrier can begin to issue payouts. Although certain health care, such as annual physicals and immunizations, may be exempt from these requirements, your deductible may apply to many other medical products and services.

What Are the Advantages and Drawbacks of HDHPs?

Your deductible plays an integral role in your health insurance premiums. Generally, a higher deductible, such as those included in HDHPs, may help you save on regular payments. However, this higher out-of-pocket requirement means you’ll likely need to pay more for covered services, procedures and products before receiving aid from your policy. Conversely, plans with lower deductibles can begin issuing payouts without you having to contribute as much toward your care, but you’d need to pay more on a regular (e.g., monthly) basis to maintain your policy.

What About Health Savings Accounts?

HDHPs are often paired with health savings accounts (HSAs). You can contribute part of your paycheck toward these tax-advantaged savings accounts. Funds can grow tax-free, and contributions are typically tax-deductible. You can access these funds to help manage out-of-pocket medical expenses, which can be particularly advantageous if you need to reach the higher deductible of your HDHP. By pairing these two tools together, you may enjoy lower rates while having an ideal arrangement to help manage the higher out-of-pocket expenses.

We’re Here to Help

Contact Montero & Brage Insurance LLC in Fort Myers, Florida, today to learn more about HDHPs and HSAs and find the right health plan for you and your family.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.