What is the downside to having a high-deductible?
Asked by: Donnie Hill | Last update: October 21, 2025Score: 4.7/5 (54 votes)
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.
What are the disadvantages of a deductible?
- The insured will be required to pay off the medical expenses, even if they do not have the resources to bear the cost. ...
- In case of a higher deductible, the insured will be required to pay from their pocket, reducing their savings.
What happens if you have a higher deductible?
Policies with lower deductibles typically have higher premiums, meaning you'll pay more each month for your insurance coverage. However, if you have a higher deductible, you may be able to save money on your premiums but may be responsible for paying more out of pocket if you need to file a claim.
Who should avoid a high-deductible health plan?
Generally high deductible plans are best for younger and/or healthier people. If you have recurring medical needs, anticipate some medical expense, are older, etc. don't favor the high deductible plan.
What Is The Downside To Having A High Deductible? - InsuranceGuide360.com
What is one disadvantage to a high-deductible health plan?
Cons of High Deductible Healthcare Plans
For example, someone injured may avoid the emergency room if they know it will result in an expensive bill that will be applied to the plan deductible. This reluctance is especially true for those new to a plan who have not yet established an HSA.
What is the upside to having a high deductible?
This means you'll pay less each month for insurance and more out-of-pocket when you receive care. The upside? Preventive care is still covered at 100 percent on these plans. Once you hit your deductible, your health plan will start to cover the cost of your other care.
Why would someone choose a higher deductible?
If you are generally healthy and don't have pre-existing conditions, a plan with a higher deductible might be a better choice for you. Your monthly premium is lower since you're only visiting the doctor for annual checkups, and you're not in need of frequent health care services.
Is it better to have HDHP or PPO?
HDHPs can be a good form of insurance for the young and healthy — especially if your employer offers you HSA contributions. But for anyone with significant medical expenses, an upcoming surgery, or a serious health condition, a PPO could be a better fit because of the lower deductible.
Do copays 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.
Is it better to have a high or low deductible?
Individuals. You would most likely benefit from a low-deductible plan if you're older, have a chronic condition, or simply receive frequent medical care. Having an LDHP can save you money if you have costly health issues or a larger family.
How much does a doctor visit cost with a high-deductible health plan?
A rough guide is: New Patient Office Visit: $200 - $450 depending on how much time is spent on evaluation and/or how many medical conditions are addressed. Subsequent Office Visits: $75 - $300 depending on how much time is spent on evaluation and/or the number of medical conditions being addressed.
What is a normal deductible for health insurance?
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).
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).
Is it better to have a deductible or not?
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.
What is a typical high deductible?
But they come with higher annual deductibles. For 2025, the Internal Revenue Service (IRS) defines a high-deductible health plan as any plan with an annual deductible of at least $1,650 for an individual or $3,300 for a family.
Do doctors prefer HMO or PPO?
HMO plans might involve more bureaucracy and can limit doctors' ability to practice medicine as they see fit due to stricter guidelines on treatment protocols. So just as with patients, providers who prefer a greater degree of flexibility tend to prefer PPO plans.
Who is a good candidate for an HDHP plan?
If you're generally healthy and don't have medical expenses beyond annual physicals and preventive screenings, an HDHP could save you several hundred dollars or more a year.
Can you switch from HDHP to PPO?
Employees currently enrolled in the group medical plan who experience a HIPAA SER have the right to switch benefit plan options. For example, if an employee is enrolled in HDHP single coverage and gets married, they have the right to add the spouse and switch to a different medical plan option (such as to a PPO plan).
What are the disadvantages of a high-deductible health plan?
Cons. Higher deductible: If your deductible is higher, it means you are required to pay for your medical care out of pocket up to that amount before your health plan begins to help pay for covered costs. The exception is for preventive care, which is covered at 100% under most health plans when you stay in-network.
What deductible is too high?
A high-deductible plan is any plan that has a deductible of $1,600 or more PDF opens in new tab for individual coverage and $3,200 or more for family coverage in 2024. Compared to a traditional health insurance plan, a high-deductible health plan comes with a higher deductible and lower premium.
What is considered a high-deductible health plan in 2024?
For calendar year 2024, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,600 for self-only coverage or $3,200 for family coverage, and for which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not ...
How to pay for surgery with a high-deductible health plan?
Once you reach your network deductible, you'll split the cost of covered care with your health plan through copays or coinsurance. Then, once you reach your plan's network out-of-pocket maximum, the plan will pick up the tab for any future covered services.
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 pros and cons of a PPO?
PPO insurance plans allow plan participants to choose from a larger network of doctors and hospitals without needing a referral to see a specialist. While PPO plans allow for out-of-network care, they tend to have higher monthly premium costs and annual deductibles than other types of health insurance plans.