When it comes to insurance plans, you have a variety of different options available to you. If you are concerned about costs then the best way to get the lowest premiums on your medical insurance is to sign up for a high deductible health plan (HDHP). These plans are also known as catastrophic health insurance. Their primary feature is that they have extraordinarily high deductibles but are much cheaper than other types of insurance. In fact, the higher your deductible the lower your health insurance premiums will be. This may sound like a great insurance product. However it may not be right for everyone.
The primary benefit of a high deductible health plan is the potential low cost. If you are working on a budget then the lowered health insurance premiums can help you stretch your money. Another benefit is that this type of insurance is easier for people with preexisting conditions to obtain. Most insurance companies do not like to insure people who have a prior medical condition because of the likelihood that they will pay out more in benefits than they will receive in health insurance premiums. Since you are picking up the tab for most of your medical costs, an insurance company will be more willing to provide you with medical coverage.
That brings us to the major disadvantage to having a high deductible health plan. The deductible can be anywhere from $1000 to $10,000. This is the amount of money that you have to pay out of pocket before the insurance company will begin paying your claims for coverage. You can get a little bit of help by pairing this type of insurance with a health savings account that you can fund with pretax dollars. However, this type of account is not much help if your budget is so tight that you can’t afford to save the money you will need to pay your deductible.
Additionally, a high deductible health plan may have a benefit cap of $1 million to $5 million. Once this cap has been reached, no more benefits will be paid. This means that if you have a catastrophic medical event, such as getting into an accident or get diagnosed with a major chronic disease, then your treatment may easily exceed this maximum. You will need to pay for your medical expenses when this happens. The best way to determine if this is the right plan for you is to speak to a qualified insurance professional or call 866-396-9140
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