If you're generally healthy and don't have pre-existing conditions, a plan with a higher deductible might be a better option for you. Your monthly premium is lower, since you only go to the doctor for annual checkups and you don't need frequent health care services. For the insurer, a higher deductible means you're responsible for more of your initial health care costs, saving you money. For you, the benefit means lower monthly premiums.
Do you want to insure your home or vehicle? You may have found important terms, such as the deductible and the premium. While the premium is your monthly insurance plan payment, the deductible is the amount you'll pay out of pocket before your benefits begin. The higher your deductible, the lower your premium and vice versa. Auto insurance companies often offer a wide range of insurance discounts, for example, to combine home insurance and car insurance, maintain a good driving record, or pay the annual premium in advance.
In general, those who use their health plan a lot will want to opt for an LDHP to keep their out-of-pocket expenses affordable, while those who use it little will want to opt for an HDHP to save money on their monthly health insurance premiums. As an employer, you can save money on premiums and reduce your financial burden by opting for an HDHP if, in general, your employees are in good health and have no history of illness. The annual deductible is the amount you must pay for health care services (not counting insurance premiums) for a given year before your insurance begins to cover the cost. In these cases, the lower HDHP premium will likely save you more money than you would spend on medical care.
The same inverse relationship applies when it comes to the deductible and the amounts of homeowners insurance premiums. Even in the case of chronic illness, a plan with high deductibles with a low monthly premium and a generous employer contribution to the HSA may be cheaper than a traditional plan with a higher monthly premium and no employer contribution. Understanding how plans with high and low deductibles work, how monthly premiums influence your decision, and how these plans can affect your coverage will help ensure that your family has the most appropriate health care plan in the coming year. Whether you're looking for home insurance, car insurance, or health insurance, premiums aren't the only thing expense that you must take into account.
Plans with lower deductibles and higher premiums are recommended for people who expect to receive a significant amount of health care. While HDHP plans have higher deductibles than LDHPs, they may be the most affordable option in terms of premium costs. Keep in mind that incidents involving fault may remain in your insurance history for several years, increasing your premiums, so you may not want to file a claim every time. The additional money you would pay in premiums would be much less than what you would pay in deductible amounts and maximum out-of-pocket expenses with an HDHP.
