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Should You Choose a High or Low Deductible Health Insurance Plan?

Deductibles are a common source of confusion, and the array of options makes it difficult to choose the right plan, which is understandable. 

Health insurance deductibles are the amount you have to pay for your health care before your insurance starts covering costs. Deductibles can range from a few hundred to thousands of dollars, depending on the policy. Generally, once you meet your annual deductible, your insurance will require you to pay coinsurance. Once this cap is met, your insurer pays 100 percent of covered services.

What is a High-Deductible Plan

High-deductible health plans are plans whose deductibles surpass a limit set by the IRS. For 2022, those deductibles are no less than $1,400 for individual coverage or $2,800 for family coverage.

For the insurer, a higher deductible means you are responsible for more of your initial health care costs, saving them money. For you, the benefit comes in lower monthly premiums.

However, high deductible plans do have downsides. Meeting a high deductible can seem impossible due to costly medical bills.

High-deductible plans make sense for healthy people and those without young children. 

What is a Low-Deductible Plan?

With a low-deductible plan or even a no-deductible plan, the amount you have to pay before your insurance company takes over is far less overwhelming. But you’ll pay a much higher premium for these plans. Depending on the location and plan details, a low-deductible plan can cost twice as much per month as a high-deductible plan.

Plans with lower deductibles and higher premiums are recommended for people who expect a significant amount of medical care. Also, families with small children can benefit from a low-deductible plan, mainly if the children are involved in sports or frequently ill.

If you need help choosing a plan call us today at 732-363-3888 to speak with a Cosmo Insurance Agency broker. 

Cosmo Insurance Agency is a full-service independent insurance agency based in Hackensack (Bergen County) and Lakewood (Ocean County), New Jersey that offers an all-encompassing range of insurance options for both individuals and businesses. Cosmo keeps its promise to assure an efficient and creative approach to the services we offer. Each of our clients experience a personalized and long-term relationship with us. Our New Jersey based team of health brokers guides our clients in helping them choose the most cost-effective options. By incorporating our knowledge of the insurance guidelines for healthcare, employee benefits, life insurance, self-insurance, dental, disability, and long term care insurance, we keep our clients up-to-date with affordable plans that cover all their specific insurance needs.