What Is a High Deductible Health Plan?

A high deductible health plan puts the original burden of paying health costs on the insured. High deductible means the insurance policy will not kick in right away. Instead, the individual must pay the deductible first, which can be in excess of $5,000 on some plans. Then, once the individual has met this deductible in a given year or on a given payment, the insurance company will step in and pay for remaining costs.

Per Occurrence

Many plans have a per occurrence deductible that limits the amount an insured will have to spend on one health care expense before insurance starts to pay.

Per Policy

Most plans have a per policy deductible designed for the insured person to carry the bulk of initial expenses.

Benefits

The main benefit of a high deductible plan is the low premium. For health individuals who rarely use health care, a high deductible plan will be the least expensive option. They can still remain covered in case of an expensive emergency, but they will handle day-to-day insurance expenses on their own.

Downsides

The main down side is the deductible itself. Regardless of the policy, an insured must always pay this deductible before insurance will help out, which can be costly for a small emergency where the cost hovers right around the deductible.

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