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High Deductible Plans: Who Pays First?

Over 13.5 million Americans are enrolled in a high-deductible health plan. That’s about 1 in every 4 people. You may even be one of them.

High deductible plans are on the rise. In fact, enrollment rose from 4% in 2006 to 17% in 2011 (for employer-sponsored plans).

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So, why are so many people choosing these types of plans?

High deductible health plans have a high deductible and a lower premium. Preventive care services are often covered 100%. That means you pay less out of each paycheck, but more up front before your insurance kicks in. These plans are great if you’re well and don’t generally need much healthcare each year. You can save thousands of dollars each year in premiums.

Consider This Scenario

You start having headaches and go to your doctor to get checked out. He orders an MRI with contrast to get a better look.

  • You have a high deductible plan with a $3,000 deductible.
  • Your employer has put in $1,000 to help you pay that deductible. (Many employers will help fund high deductible plans.)
  • Since you have insurance, you’ll get a discounted rate on the MRI, but the procedure will still cost around $1500.
  • That means you owe $500 out of pocket.
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High Deductible Plans Work Well for Some

These plans work really well for some people. Our goal is to help you understand what having this kind of plan means. Some financial experts will tell you to save money on your premiums and put it in an emergency fund to pay for any healthcare expenses that come up. This isn’t a bad idea at all.

Let’s say you had a bad knee, or maybe you have GERD and you plan on getting an endoscopy this year. A high-deductible plan may not be the best choice.

Is a High Deductible Plan Right for Me?

High deductible plans work well for those who:

  • Are well and don’t go to the doctor often
  • Have money to pay up-front for care

High deductible plans may not be right for those who:

  • Need frequent healthcare
  • Have a chronic condition
  • Don’t have money up-front to cover the cost of healthcare services

High Deductible Plans May Be Our Future

The way things have been trending, many think high deductible plans will be the norm in the future. It’s important to know the facts and learn how to prepare so you don’t end up with bad medical debt. That can really mess up your credit score.

If you’ve already enrolled in a high deductible plan this year, but feel like it may not be right for you, don’t worry. You’ll have a chance to change next year.

In the meantime, we’ll help you understand what steps you can be taking to reduce your cost of care, find medical billing errors, and more.

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Comments

  1. Bill | 18 January 2013 at 7:29 pm

    If more and more people go to high-deductible and pay less, at some point is there not enough money in the system overall to also cover those for whom the high-deductible plan is not advantageous, and those “low-deductibles” end up having to pay ever higher premiums – even if they can’t afford it?

    • HooPayz | 23 January 2013 at 8:20 pm

      Bill, thanks for your comment. We don’t think high deductible plans themselves will make premiums go up. Presumably the same amount of money will be spent for healthcare and if it goes up, everyone’s premium will go up correspondingly. Those with a high deductible plan will also get increases in premiums.

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    • HooPayz | 15 February 2013 at 3:42 pm

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