Skip to content

Fitness For Health

  • Home
  • Fitness
    • Health Articles
    • Health News
    • Psychology Health for Man
    • Woman 21-35 years old
  • Health Services
    • Health Plus
    • Psychology Health for Woman
    • Health Advice
    • Healthy Nutrition
    • General Articles
  • Health Tips
    • Healthy Living
    • Healthy Workout
    • Men’s Health
    • Nutrition
    • Traditional Medicine
  • Contact Us

Premiums versus deductibles: The differences that can impact your budget

December 5, 2022 by Elizabeth

You’ve narrowed down your health insurance plan options, and now it’s time to choose. Often, instinct tells us to go with the lowest premium (your monthly payment) – but is that really a good idea? When it comes to health coverage, picking a plan with a high deductible may actually be more expensive in the end.

The truth is, your premium and your deductible (what you pay before your plan pays) are more connected than you may expect. The pricing of one may impact that of the other. So, it’s important to know the differences between them and how they work together so you can choose the plan that’s best for you – and your wallet!

Premiums, deductibles, yearly maximums?

Brush up on common health insurance terms so you can have a better understanding of both your needs and your plan.

Does your premium go towards your deductible?

No, your premium does not go towards your deductible, and it doesn’t count for your out-of-pocket maximum, which is the most you’ll pay for care. But deductibles and premiums flow into one another. They have an inverse relationship. When one is more affordable, the other tends to be more expensive.

Why does having a higher deductible lower your insurance premiums?

A high-deductible health plan (HDHP) is an insurance plan with a low premium and a high deductible. But why would one affect the other? Think of it in terms of balance. A plan with both a high deductible and high premium would be too expensive for a payer. A plan with a low deductible and low premium would be too expensive for an insurance company. Making them opposites helps balance costs for both a payer and provider.

The benefits of a high deductible versus a low deductible medical plan

Typically, any health insurance plan with a deductible over $1,500 for an individual and $2,500 for a family is considered a high-deductible plan. But why would a plan with a high deductible be a good choice?

If you’re enrolled in a plan with a higher deductible, preventive care services (like annual checkups and screenings) are typically covered without you having to pay the deductible first. And a higher deductible also means you pay lower monthly costs. If you’re not receiving medical care often, that could save you a lot of money. Plus, some employer-sponsored health plans pair high-deductible plans with a Health Savings Account (HSA) that your employer may contribute to – and this account can be used toward your deductible.

On the flip side, a low-deductible plan is considered by many to be a good peace-of-mind option. While monthly payments may be more expensive, your deductible is lower, which can be more affordable if something unexpected happens. You’ll also pay less money before your plan starts paying.

Is it better to pay higher premiums or a higher deductible?

The truth is that there’s no one-size-fits-all answer to this question. Choosing the right plan depends on both your health needs and financial situation. Let’s take a look at some key factors that may help you select the plan that will work best for you.

Choosing a higher premium, lower deductible plan

A lower deductible plan is a great choice if you have unique medical concerns or chronic conditions that need frequent treatment. While this plan has a higher monthly premium, if you go to the doctor often or you’re at risk of a possible medical emergency, you have a more affordable deductible. This plan also works well for those who need prescription medication or who have family members in need of frequent care.

Choosing a lower premium, higher deductible plan

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. If you choose this type of plan, make sure your budget can cover your plan’s deductible out of pocket in case of an unexpected illness or emergency.

Getting more help with health insurance

Have more questions? Our experts are ready to help you choose a health plan you’re confident in.

Post navigation

Previous Post:

What China’s Zero-COVID Policy Means For Global Health

Next Post:

Minimally-processed foods vs. highly-processed foods: What to know

Recent Posts

  • Why the digital health user experience is key to senior uptake
  • How to Get Motivated to Work Out
  • Make New Year’s Resolutions That Work
  • Health insurance for college students
  • LG Electronics unveils wireless earphone to get people into deep sleep

Archives

  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019

Categories

  • Best Fitness Planner
  • Better Health
  • Fitness
  • Fitness Instructor
  • Fitness Retreat
  • Fitness Sites
  • Fruit for Health
  • General Articles
  • Global Health
  • Health Advice
  • Health And Fitness Planner
  • Health And Wellness
  • Health Articles
  • Health Department
  • Health Education
  • Health Food
  • Health News
  • Health Plus
  • Health Policy
  • Health Products
  • Health Services
  • Health Store
  • Health Tips
  • Healthcare Articles
  • Healthy And Fit
  • Healthy Living
  • Healthy Nutrition
  • Healthy Workout
  • Helps Your Kids
  • Kids 2-5 years old
  • Men's Health
  • Nutrition
  • Psychology Health for Kids
  • Psychology Health for Man
  • Psychology Health for Woman
  • Sports Exercise
  • Top Fitness Gym
  • Traditional Medicine
  • Whole Food Vitamins
  • Woman 13-20 years old
  • Woman 21-35 years old
  • Women's Health Workouts
  • Home
  • Advertise Here
  • Contact Us
  • Disclosure Policy
  • Sitemap

Partner Links

© 2023 Fitness For Health | Built using WordPress and SuperbThemes