A growing number of Americans are paying lower health insurance premiums in exchange for high deductibles, taking a gamble that saving money now won’t put them in a tough financial situation if they’re hit with high medical bills.
As we enter open enrollment season, it’s important to at least consider these low-premium plans to determine if the increasingly popular risk is right for you.
High-deductible health plans are health insurance policies that require policyholders to spend a certain amount of money on their health care before coverage kicks in. For 2015, an individual plan with a deductible of at least $1,300 or a family policy with a deductible of at least $2,600 falls into this category. More benignly referred to as “consumer-directed health plans,” they’re attractive to employers and individuals alike because they come with lower premiums and reduce the use of health care services overall.
“Deductibles are a fairly new concept,” says Sabrina Corlette, a senior research fellow with Georgetown University’s Center on Health Insurance Reforms. Over time, “people realized it was a way to reduce the use of health care services. Because if people are required to pay for some of these costs up front, they are less likely to use nonessential services.”
HDHPs Are on the Rise
To counteract the rising cost of health care in recent years, deductibles have grown in popularity and price tag. In 2014, 80 percent of insured workers had policies that included a deductible, according to the 2014 Employer Health Benefits Survey from the Kaiser Family Foundation Health Research & Educational Trust. The average annual deductible among employees has risen 47 percent since 2009, from $826 to $1,217.
Fortunately, provisions under the Affordable Care Act can help contain costs. In 2015, an individual will not pay more than $6,450 in out-of-pocket costs, and a family’s out-of-pocket maximum is set at $12,900.
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Jeffrey R. Ungvary President