Should I enroll in a high- or low- deductible insurance plan?

There are pros and cons to selecting any kind of insurance plan, but finding the right kind of plan for your lifestyle and healthcare needs often comes down to your monthly budget and how much risk you’re comfortable assuming.

Let’s take a moment to unpack this a little.

When it comes to how much your health insurance is going to cost, the two factors that influence it the most are your premium—the monthly fee you pay in order to have insurance—and the deductible—the amount you’ll have to pay before insurance kicks in.

Whether you’ll want to choose a low-deductible plan or a high-deductible plan depends upon a number of factors.

Low-deductible plans typically have higher monthly premiums, but since your deductible is lower, your insurance company will begin paying a percentage of your medical bills sooner. A low-deductible plan may appeal to you:

  • If you’re pregnant or planning to become pregnant during the plan year
  • If you have a chronic condition that requires frequent medical care or interventions
  • If you’re planning to have surgery during the plan year
  • If you take prescription medications to treat frequent or chronic illnesses
  • If you have children—especially if they participate in outdoor activities

In contrast to low-deductible plans, high-deductible plans typically have lower monthly premiums, but have a higher dollar threshold before your insurance begins to pay a percentage of your medical bills. A high-deductible plan may appeal to you:

  • If you’re young, generally healthy, and don’t anticipate needing to access health care much in your plan year--since these plans generally have lower monthly premiums, they free up a little more cash to pay for things like groceries, gas and rent
    • The potential downside to this is while you pay less in premiums each month, having a high deductible means that if you do face a serious illness or injury, you’ll be responsible for paying more out-of-pocket for the care you receive. 
  • If your financial situation allows you to afford to pay large, unexpected medical bills quickly
  • If you are generally healthy and are also contributing to a Health Savings Account

How does a Health Savings Account work?

Similar to a flexible spending account (FSA) or 401(k), an HSA is a special bank account that allows you to save money on a pre-tax or tax-deductible basis to be used specifically for medical expenses in the future. Unlike FSAs, the money in an HSA rolls over every year and can also earn interest. By pairing an eligible plan with an HSA account, participants can save money on health care and earn a tax write-off.

If you are looking for individual or group health insurance, contact us at (888) 535-4831 to get in touch with an agent who can help you through the process, or request a quote at https://www.sanfordhealthplan.org/get-a-quote.

Current Sanford Health Plan members can access their SBC and other plan information in their secure member portals at sanfordhealthplan.com/memberlogin or by contacting customer service at the number listed on the back of your insurance member ID card.