Most health insurance plans have deductibles. While you have an outstanding deductible, it might make certain care more expensive. To reduce the cost of care where your deductible applies, then you will have to pay off the deductible. However, deductibles themselves often cost several thousand dollars. Still, you might have resources available to help you save for the cost of the deductible.
How Deductibles Work
Health insurance deductibles are part of the out-of-pocket costs that a policyholder pays for medical care. Your insurer will not pay this portion of your costs. Instead, you must pay the deductible cost, and only then will your insurer offer coverage. A deductible is different from the co-insurance or co-payment that you might pay when you see a doctor.
If you have not paid off the deductible, then the cost of these services might be higher. If you have a $3,000 deductible and a $12,000 medical bill, then you must pay the first $3,000 of that bill. Your health insurance will then pay for some or all of the remaining $9,000.
Not every type of health care cost is subject to the deductible. You can often receive checkups, lab work, vaccinations or prescriptions without the deductible applying. The deductible will more likely apply to specialty medical care. Certain imaging services and surgical procedures often have this requirement. Keep in mind, if a procedure doesn’t have coverage, then your plan won’t pay at all, regardless of deductibles.
Saving for Your Deductible Cost
Deductibles can be financial burdens for many policyholders who need medical care. There are ways you can save money in the meantime that you can devote to the deductible cost. Some of these savings vessels are:
- Supplemental Insurance: Some insurers offer a policy supplement that you can apply to costs not covered by your primary coverage. It can often apply to your deductible.
- Health Savings Accounts (HSAs): These accounts allow you to put money into a tax-deferred savings account. You can specifically use the money for certain medical costs, including deductibles.
- Health Reimbursement Arrangements (HRAs): Employers often fund HRAs. However, unlike with benefit deductions, employees don’t contribute through their paychecks. To get coverage for costs like deductibles you will have to submit a claim to your employer’s HRA provider.
- Some plans, like those offered through the federal health insurance marketplace, offer deductible savings for qualifying individuals.
Of course, old-fashioned budgeting can also assist you with your deductible, too. Still, there are often easier solutions out there. The best way to know what to do is to talk to your doctor and insurance provider. They can help you estimate what care you receive regularly might be subject to the deductible. Then, you can decide how you want to approach savings.
FAQ’s About How Can I Save For My High Medical Insurance Deductible?
What is a medical insurance deductible?
A medical insurance deductible is the amount you pay out-of-pocket for healthcare services before your insurance plan starts to cover costs. It’s a predetermined amount set by your insurance policy.
How can I prepare for a high deductible?
To prepare for a high deductible, consider setting aside funds in a savings account, adjusting your budget to allocate money for healthcare expenses, and exploring health savings accounts (HSAs) or flexible spending accounts (FSAs) if they’re available to you.
What is a Health Savings Account (HSA)?
An HSA is a tax-advantaged savings account designed for individuals with high-deductible health plans (HDHPs). Contributions are tax-deductible, the money grows tax-free, and withdrawals for qualified medical expenses are also tax-free.
Can I use an HSA for expenses other than medical costs?
While HSAs are intended for qualified medical expenses, after age 65, you can withdraw funds for non-medical expenses without penalty, but these withdrawals will be subject to income tax.
Are there ways to reduce my medical expenses?
Yes, you can reduce medical expenses by choosing generic drugs, seeking in-network providers, utilizing preventive care covered by your insurance, and negotiating payment plans or discounts with healthcare providers.
What should I consider when choosing a high-deductible health plan?
When choosing a high-deductible health plan, consider your overall health, estimated healthcare costs, whether you qualify for an HSA, and the plan’s premium, deductible, and out-of-pocket maximum.
How much should I save for my deductible?
Aim to save at least the full amount of your deductible. However, it’s wise to save beyond this to cover co-pays, co-insurance, and non-covered expenses that might arise.
Is there insurance to cover my deductible?
Yes, some insurance products, like gap insurance or supplemental insurance plans, can help cover your deductible and other out-of-pocket expenses.
How can I save money for my deductible if I have a tight budget?
Start by reviewing your expenses and creating a budget. Cut unnecessary spending, look for ways to increase your income, and consider automating savings directly from your paycheck. Even small, regular contributions to a savings account can add up over time.
What happens if I can’t pay my deductible?
If you can’t pay your deductible, you may face delays in non-emergency medical services or be responsible for the full cost of care. It’s important to communicate with your healthcare provider about your situation as they may offer payment plans or sliding scale fees based on income. Additionally, seek out community resources or financial assistance programs that may be available to help cover healthcare costs.