Introduction:
High-Deductible Health Plans or HDHPs plans benefit those people who require less insurance premium. However, the plan has its drawback that before you receive all the insurance benefits, you have to pay high deductibles. Deductible is the agreed amount to be paid initially for your medications. You would be eligible to claim only after that.
Although the plan has its perks, one cannot help but question whether it is the right choice. This blog will enable you to have a closer look at the pros and cons of HDHPs.
Health insurance plans with high deductibles are not like traditional health plans, comparatively higher deductibles than the traditional health plans. A health plan deductible is an amount you pay to avail your service through an insurance plan.
What is Deductible in Health Insurance?
Deductible in health insurance is the amount you have to pay directly from the pocket to enjoy your insurance coverage or benefits for a particular medical event. You do not have to pay deductibles when availing of preventive care. It’s as if you are cooperating with your insurer to cover the medical cost
Benefits of HDHPs:
Low Monthly Premiums:
If you seek a means to reduce your monthly expenses on health care insurance, then HDHPs are the best solution for you. This benefits those who have low monthly incomes.
Under this plan, the young generation can benefit by promoting preventive care services, which would keep them from complicated health issues at later stages. With HDHP’s high deductible health plan, you may have to pay more based on the services used.
Awareness of Medical Expenses:
To avail an HDHP, careful service selection is required because they are bound to have costlier upfront or out-of-pocket expenses.
This needs to be done through high levels of decision-making, of an informed nature, so that they can decide the most suitable service and so as to control the healthcare cost.
Promotes Wellness-Focused Behaviour:
As the insurers tend towards value-based service rather than volume-based service, there has been a focus on preventive care programs and action.
The reason is that health problems need to be contained and prevent them from developing into serious health conditions in the future. Employers recently joined hands with insurers to provide well care programs under HDHPs.
Limitation of HDHP:
High Deductible or Out of Pocket Expenses:
The major disadvantage associated with the HDHP is its expense to begin with. Handling or paying a large deductible if there is severe health complications creates enormous financial pressure. It reaches a point where people will not seek health services when they need them the most owing to the failure to raise the deductible.
Inadequate Cover:
HDHPs will provide limited coverage. They will not provide complete cover for health care, which may expose people with complex health conditions to a significant setup in the process. This shifts the burden to those who require the funds, forcing them to incur the costs of high and unforeseen direct out-of-pocket payments.
Chances of Underinsurance:
Studies indicate that individuals who have complex health issues and even mental illnesses were often reluctant to visit health care services out of fear of their high deductibles. This is a serious matter, and insurers should devise methods of compensating for such exceptional cases as mental illness.
Conclusion:
An HDHP, which charges a less monthly premium, will be suitable for you if you have a good physical and mental health profile and occasionally consult a doctor. You can change the plan with age since health complications develop with age.
In case you have a chronic condition, and visitation to a doctor is an essential constituent of the plan year, then you could consider whether your medical budget favors a low premium. Do good research on HDHP terms to decide if the coverage would be great enough for your needs. Besides saving a dollar or two from lower premiums, some other strictnesses and benefits are inbuilt and intrinsic to your health profile and spending power.
A high-deductible health plan allows you to calibrate with lower monthly expenses at the cost of up-front out-of-pocket costs. Although out-of-pocket expenses might be low and attractive but render them powerless in certain conditions. You can further choose flexible options to meet your needs and budget.