What are the disadvantages of a deductible?
Asked by: Camren Waters | Last update: July 26, 2025Score: 4.6/5 (57 votes)
What is the downside of having a deductible?
Disadvantages of Deductibles
If you have a high health insurance deductible, you may hesitate to seek medical care until you've met your deductible. It can lead to delayed care, which can be harmful if you have a serious or urgent medical condition.
What are the pros and cons of having a high deductible?
High deductible health plans can be a great option for healthy individuals and families who don't need a lot of medical care. They offer lower monthly premiums and tax benefits through HSAs. But, if you need a lot of medical care, high deductible health plans can be expensive.
Why is it not a great idea to have a high deductible?
Large medical expenses: Since HDHPs generally only cover preventive care, an accident or emergency could result in very high out-of-pocket costs. Future health risks: Because of the costs, you may refrain from visiting a physician, getting treatments, or purchasing prescriptions when they're not covered by your HDHP.
Is it better to have no deductible?
Health insurance with zero deductible or a low deductible is best if you expect to need major medical care in the upcoming year. Even though you'll pay more for the plan, it will help you save overall because the full benefits begin right away.
New HSA Rules in 2025 You Need to Know
Is it better to have a $500 deductible or $1000?
Remember that filing small claims may affect how much you have to pay for insurance later. Switching from a $500 deductible to a $1,000 deductible can save as much as 20 percent on the cost of your insurance premium payments.
What are the 3 reasons for deductibles?
- Moral hazard. Moral hazard is the behavioral risk that the policyholder will purposefully seek out insurance payouts. ...
- Reduction of claims.
What is too high of a deductible?
In 2023, health insurance plans with deductibles over $1,500 for an individual and $3,000 for a family are considered high-deductible plans.
Why would someone want a high deductible but a lower premium?
The size of your monthly premium impacts your deductible—typically, the lower the premium, the higher the deductible. Why does having a higher deductible lower your insurance premiums? Because you'd be taking on more costs if you actually need care, rather than paying more each month toward potential care.
Who should not use a high-deductible health plan?
A chronic illness, such as heart disease or diabetes, can be much more expensive to manage under an HDHP than a traditional health care plan. With these conditions, regular medications and health screenings may be required. These costs may quickly add up until deductibles are finally met.
Is a $3,000 deductible high?
The IRS defines high-deductible health plans for 2023 as: Individual plans with deductibles of at least $1,500. Family plans with deductibles of at least $3,000.
Does copay count towards deductible?
No. Copays and coinsurance don't count toward your deductible. Only the amount you pay for health care services (like the medical bill you receive) count toward your plan's deductible.
What is a disadvantage of having a high deductible?
The main drawback of an HDHP is high out-of-pocket expenses for nonpreventive care. If you're healthy but go to urgent care a few times, you can pay a lot out of pocket but not exceed your yearly deductible. Or you could require unexpected expensive treatment early in the year.
Do prescriptions count towards the deductible?
Any amount you pay for the drug generally will count toward your deductible and/or maximum out-of-pocket limits.
Is it cheaper to have health insurance or pay out-of-pocket?
People without insurance pay, on average, twice as much for care. This means when you use a network provider you pay less for the same services than someone who doesn't have coverage – even before you meet your deductible.
What should my deductible be for full coverage?
$500 is the most common car insurance deductible. Not every type of car insurance coverage uses a deductible. A higher car deductible can lower your insurance premium. You pick your deductible when buying insurance.
Is a $0 deductible good?
A no-deductible plan can be a good choice for your family if you want immediate coverage without needing to meet a deductible first, especially if multiple family members need regular care. However, these plans often have higher premiums, so consider your budget.
What if I can't pay my deductible health insurance?
Your healthcare provider can't waive or discount your deductible because that would violate the rules of your health plan. But they may be willing to allow you to pay the deductible you owe over time. Be honest and explain your situation upfront to your healthcare provider or hospital billing department.
What is a normal health insurance deductible?
What is a typical deductible? Deductibles can vary significantly from plan to plan. According to a KFF analysis, the 2024 average deductible for individual, employer-provided coverage was $1,787 ($2,575 at small companies vs. $1,538 at large companies).
What is a good premium for health insurance?
PREMIUMS FOR SINGLE AND FAMILY COVERAGE
The average premium for single coverage in 2024 is $8,951 per year. The average premium for family coverage is $25,572 per year [Figure 1.1].
Is $5000 a high-deductible health plan?
For families, the deductible has to be at least $2,700, with a $13,500 max out-of-pocket. Many high deductible plans actually have a much higher deductible ($5,000-$7,000).
Why would someone choose a high-deductible plan?
HDHPs have higher out-of-pocket costs than LDHPs. So, this type of plan is best for healthy people who expect little to no healthcare expenses. If this outlines your scenario, the HDHP's lower premium will likely save you more money than you would spend on medical care.
What is a deductible in insurance for dummies?
Understanding what a deductible is. and how it works can help consumers make informed decisions when purchasing insurance and filing claims. Simply put, a deductible is the amount of money that the insured person must pay before their insurance policy starts paying for covered expenses.
Is it better not to have a deductible?
It depends on your health needs and your budget. If you and your covered family members are in good health and don't often see a doctor, a high-deductible plan may be a better option. But if you think you or your family members may need to seek medical care often, a low-deductible plan may be the best fit.