The deductible is the dollar amount an insured individual must pay for covered expenses during a calendar year before the plan begins paying co-insurance benefits. Simply put, this is how much you will have to pay before the insurance carrier will start paying part of your bill (copay), or covering all costs.
However, this may not apply to preventative care services. Think about it. The insurance company doesn’t want you to put off doing an annual checkups or other routine preventative exams in the risk that they may not catch something early, and later on down the line after it becomes worse and more costly to perform treatment. For this reason, your insurance will immediately start covering some of these costs without the need to hit your deductible. Speak to your broker or agent to be sure what your plan covers.
Health Insurance should not be for routine stuff. Rather, it’s meant to protect you and your family from catastrophic financial loss.
If you’re healthy and hardly ever go to the doctor then it’s probably best just to have the higher deductible. Let’s take the two extremes for example. We’ll compare Kaiser Permanente’s 20/500 plan at $467*/mo. and the 40/3000 at $257*/mo. If you get the plan with the higher deductible, with the difference of pricing, you’ll be saving $210/mo. Which calculates out to $2520/year. So hypothetically, if you did hit your deductible because you were hospitalized, you’ll have that money you’ll be saving every month to offset the cost and pay for it. If you don’t hit your deductible… which if you are healthy you most likely will not, you’ll be saving all that money.
Think of a cell phone plan. If you hardly use 450 minutes, then there’s no need to pay more for a plan that allows for 1000 minutes. You most likely won’t even hit the $500 deductible for the insurance to kick in differently than it would with the $3000 deductible.
Remember, you can change your plan at anytime and there is a 30 day free look period to see if the plan is right for you. I had someone this month just go from the 20/500 plan to the 40/3000 since they are healthy and hardly ever go to the doctor.
If you like the security of only having to pay $500 then that plan would be something to consider. However, there is the higher premium that goes along with it. If you want, meet somewhere in the middle with the 30/1500 plan and re-evaluate after a year.
Be sure to download the Kaiser Permanente Deductible Plans Brochure to see all available health plans (CA Only). I hope that all makes sense. If there is anything else just let me know. My email is wrholt@walterrayholt.com and may be reached by phone (310) 853-0782.
*Pricing shown for a 35 year old non-smoking female in Oakland, CA.