If you are like most Americans, you sign up for a private medical insurance option through your employee benefits package at work. This means that your choices for a medical insurance plan are limited to what your employer offers. Usually, most employers are tuned in to what is going on in the health care insurance industry and they, like you, are looking for the best coverage options both in terms of quality and costs. If you do not receive health insurance through your employment, then you are among the Americans that must purchase it on the individual health insurance market.
Either way, you probably have noticed another medical insurance option available to you that is different from the basic indemnity or managed care plans that might have been your only choices in the past. There is now a third choice that people are starting to see from their employers or on the individual market and this is the high deductable health insurance plan.
High deductable health insurance plans are part of a trend in the industry that has made available options for consumer directed healthcare. Consumer directed healthcare is when you decide on the doctors, hospitals and other medical service providers that you use. Contrast this with managed care plans where your care and health provider options are directed closely by the plan itself, with some managed care plans like HMOs restricting your access to medical specialists and services to only those referred by your primary doctor.
The reason that you can make your own choices for healthcare providers in high deductable health insurance plans is because you pay the full cost out of your pocket for routine medical services. This is what is meant by high deductable. These plans are meant to cover you in the event of a catastrophic accident or illness but will not start paying until you have met the higher deductable. In exchange for the higher deductable, the insurance premium you pay for the plan is less. Usually these plans are coupled with a tax-advantaged health savings account so that you can make regular contributions to a fund that you can use as you see fit for approved healthcare services.
Is a high deductable health insurance plan right for you? Probably not if you are responsible for providing access to and paying for the medical needs of a young family, or if you need more frequent doctor visits and are on prescription medication. These plans only make sense if you are young, healthy, single and don’t intend to seek routine medical care. In other words, if you only need or want coverage for a major, unexpected healthcare situation. Think of these plans as another choice in getting healthcare coverage – a choice that only you can decide if right for you or not.
