Trade-Offs Are What The Pros and Cons of High-Deductible Health Plans Are All About
When considering the pros and cons of high-deductible health plans (HDHPs), the key thing to understand is that the list is all about trade-offs. For every significant upside to these popular plans – like lower monthly premiums – there is an equally significant downside, such as higher out-of-pocket medical care and services costs. Whether a high-deductible health plan is right for you and your family will depend on your unique healthcare needs, budget, and priorities.
To understand the pros and cons of high-deductible health plans, you first need an understanding of what health insurance deductibles in Arizona are. Your deductible is the amount you must pay for covered care and service before your insurance company starts to cover the cost. For example, suppose your deductible is $5,000. If you undergo a covered outpatient procedure that costs $15,000, your responsibility (assuming you have yet to reach your deductible) would be $5,000. Your health insurance plan pays the remaining $10,000. The 2022 Kaiser Family Foundation Employer Health Benefits Survey, found that the average deductible for high-deductible plans in 2022 was $2,925 for individuals and $6,013 for family coverage.
If you are considering enrolling in an HDHP, here is what you need to know.
Pros and Cons of High-Deductible Health Plans in Arizona
Pro: Lower Premiums
The most significant trade-off on a list of pros and cons of high-deductible health plans is that a higher deductible means lower premiums. If saving on monthly expenses is a priority, you are generally healthy and don’t anticipate needing extensive care and treatment in the year ahead, the promise of lower premiums makes a high deductible health plan an attractive option.
Pro: Health Savings Accounts (HSAs)
HDHPs often offer the option of opening a Health Savings Account (HSA). An HSA allows individuals to designate pre-tax dollars for qualified medical expenses, like doctor visits, lab tests, prescriptions, dental and vision care, and more. Contributions to an HSA are tax-deductible, and any unused funds roll over from year to year, earning interest. These benefits make HSAs a valuable part of coverage for those looking for a tax-efficient way to save for healthcare expenses and can serve as a financial safety net.
Pro: Greater Value
When money comes out of your pocket to pay for something you need, you’re more likely to shop around and choose an option that provides better value. As such, people in high-deductible health plans tend to do more research and compare healthcare services and costs before selecting a provider or healthcare facility. This increased consumer engagement can lead to more informed healthcare decisions and potentially lower costs.
Related: Most Common Health Insurance Myths in Arizona
But no plan is perfect, so our discussion of the pros and cons of high-deductible health plans is shifting gears to the negative aspects of these plans.
Con: Greater Financial Burdens For Chronic Conditions or Major Medical Care
The most significant disadvantage of high-deductible health plans is the potential financial burden they impose if you require costly medical care or services. Higher deductibles mean you will have to cover more of the cost of surgery, emergency care, and treatment for chronic conditions. If your family’s health circumstances are such that you are likely to require such care, a high-deductible plan may be cost-prohibitive.
Con: Delaying or Skipping Needed Care To Keep Costs Down
Due to the high out-of-pocket costs, individuals with high-deductible plans may delay or skip necessary medical care. Fear of incurring substantial expenses can discourage people from seeking preventive care, screenings, or early treatment. This can have long-term health implications and may lead to more severe health problems, undiagnosed conditions where early detection and treatment are critical, and higher healthcare costs down the line.
Con: Limited Provider Choices
One of the most significant negatives for many Arizonans considering the pros and cons of high-deductible health plans is the limitations on network options. Some individuals and families with a favorite family doctor, clinic, or hospital are disappointed when they realize their access to care is restricted.
Before selecting a high-deductible plan, review the network of providers available and ensure they meet your healthcare preferences.
Weighing the Pros and Cons of High-Deductible Health Plans in Arizona? Arizona Health Insurance Experts Can Help.
Figuring out the pros and cons of high-deductible health plans is just one way an experienced Arizona health insurance broker can help you and your family get the coverage you need at a cost that fits your budget.
Arizona Health Insurance Experts connects Arizonans with the state’s most extensive collection of independent insurance agents and brokers. This partnership delivers the exceptional customer experience you deserve and the individual and family health insurance coverage you need. Find a broker near you today.
