Health Insurance Deductible Amount

Updated on September 23, 2013
M.M. asks from Detroit, MI
16 answers

Hi there,
I left my job to work for my husband's company; now we are getting our own health insurance independently. My question is about the deductible amount. We're trying to choose between 2 plans -- one with a $2500perperson/$5000perfamily deductible, and one with a $5000perperson/$10,000perfamily deductible. It will be my husband, me, and our 4yo on the plan. It would save us $150 a month ($1800 a year) to go with the higher deductible plan.

For regular/noncatastrophic care, like ear infections, mole removal, etc. -- will we ever hit a $2500 deductible per person? I understand if there's a major event like a car accident or something we would max it out. I'm having a really hard time making this decision! I've been very lucky to always have insurance with no deductible, so I'm not sure what to expect.

Advice/experiences appreciated! Thank you!

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answers from Boston on

What I did when figuring this out was that I first downloaded all of my claims from the prior year from my old HMO provider because I had no idea whatsoever what things cost because I always just had my co-pay and that was that. Some things shocked me - a 10 minute trip to the pediatrician for a wart to be frozen was $340. Routine bloodwork was hundreds of dollars. A visit to an ophthalmologist was $700. Allergy testing was $1200. Generic ADHD meds are $200-300 a month depending on the type. My husband met with an endocronologist - the office visit and blood work were $4000!

From there, I plugged in the deductibles, the premiums, what I paid for pharmacy and co-pays on my old plan, and the out of pocket max to find out which plan would end up costing us less. I went with a plan that has a $2500 deductible per family with a $6000 out of pocket max for in-network providers. That way even if we reach the out of pocket max, my total spending including premiums is about $8000 while on my old HMO, the premiums were much higher so once I combined those with my co-pays and occasional pharmacy expenses, I realized I was paying almost $10K a year for health coverage, to the high-deductible plan was the better buy.

It would be hard to give you advice without specifics, so see what you can download for claim history from your old provider so that you give yourselves real numbers to work with. Honestly it doesn't make sense to me that you would risk increasing your costs by $5K per year to save $1800 in premiums but I'm assuming that you would reach the $10K anyway and really, you'll only know that by actually looking at your claim history. Most of us in my family typically have only routine well visits and no one has any chronic physical health issues that are being treated, but things like getting an x-ray done to make sure that that swollen ankle your kid has is just a sprain and not a break or getting a wart or mole removed or having your doctor "run some tests" just to make sure a mild symptom isn't something more serious can add up quickly. We ran up almost $15K in claims last year, which is way more than I would have guessed.

ETA: Yes on the health savings account (HSA) for your deductible. If you go with the lower deductible, you would be able to save that entire amount in your HSA (the limit per family is $5-$6K I forget the exact amount). If you get the higher deductible, you would have to save that money elsewhere in case you ever did need to cover expenses that high. If you go with an HSA, it's another reason to have an accurate look at your claim history so that you don't opt to save too much (which can be forfeited if not spent) or too little (which may leave you without enough to cover your costs and make you lose out on tax advantages).

ETA in case anyone is still reading this - I agree with Jo that figuring out what you would actually be charged vs. what they would have billed your prior insurance company has no rhyme or reason. I tried to get some basic info from our regular docs (pediatrician and primary care) when evaluating our options and even they couldn't tell me what the contracted rate for a visit outside of well visit (which is covered 100% anyway) would be because it's different from carrier to carrier. Usually what you would charged under a HDHP is lower than the rate they would contract with an HMO but not always. It's also hard to predict expenses under these plans even when you enroll. My son needed a more detailed vision workup this year than what he would have gotten at an optomotrist so I took him to the pediatric opthamologist we've used for one of our other kids. I asked in advance what the charge would be and they said "somewhere between $300 and $700 we won't know until we bill your insurance." WTH? I figured it would be on the lower end because I knew they billed the HMO $700 and this one came in at $750 or something. It's maddening.

5 moms found this helpful


answers from Anchorage on

My only real advice is that if you go with a plan with a high deductible then make sure you have that amount available in case you need it. Build up your savings account for just in case.

4 moms found this helpful


answers from St. Louis on

I have the crappiest health insurance I have EVER had right now and my husband and I are stuck with it all because we both work for the same company. Before this past June, our insurance was decent but sucks! Our choices are $5000 deductible per person and $10,000 per family OR $10,000 per person and $15,000 per family. Now, let me tell you something only takes ONE, ONE medical emergency to create mass chaos and debt in the medical department. We have experienced this as out of the blue, my husband becomes very ill and long story short, he has Non-Hodgkins Lymphoma. Two biopsies and almost 30 days in the hospital later, the bills are staggering. Yes, it did eat up the deductible for the entire family but now we are left to pay the part that it doesn't cover. Oh what I would do to have a $2500 deductible per person choice right now. you are LUCKY!
What do you need more? Peace of mind in the event of a tragedy or an illness that you might not have ever expected or the money you will save per month on choosing the plan with the higher deductible? That's what this boils down to. If you asked me this last year....I would say the money. If you asked me this's the peace of mind. Things change and don't ever think that stuff can't or won't happen to you!!

3 moms found this helpful


answers from Williamsport on

We just chose a high ($10,000) deductible knowing we would never hit it and knowing it's worthless because we'll still be paying for all of our appointments PLUS new deductible. We're done having kids and paid out of pocket for deliveries...but there is always the CHANCE of something catastrophic. Our choice was based on the need for a low monthly payment since our income varies greatly as freelancers. We have no regular medical expenses at all, and thankfully only small ear infections, stitches etc since kids were born.

The one perk though is that the coverage DOES cover AND PAY FOR colonoscopies, mammograms, and one thorough gyno appt. and check-up per year. Since all I really need is one gyno appt per year and I've been delaying a colonoscopy and mammogram due to cost, it softened the blow quite a bit.

Review the list of covered preventative treatments and see if that helps you decide.

3 moms found this helpful


answers from Wichita Falls on

I would go with the higher deductible and put the difference into savings. In a few years you will have the deductible in savings in case you ever do need it. I would also talk with your local health care providers. Often if you pay cash up front, procedures are cheaper than what they charge insurance companies.

2 moms found this helpful


answers from St. Louis on

You will not hit the deductible under either plan from routine care so you are better off getting the higher deductible. Also look into an HSA and throw the savings in there to pay for your routine care, whatever you don't use rolls over and hopefully when you do have something that will cause you to hit your deductible you will already have it funded in your HSA.

The plan I have though work has a 3,000 individual 6,000 family deductible but my employer funds half the deductible through the HSA. Sure it stunk to have to fund my half of the deductible the first year I had it and tore my ACL but funding 1,500 is a lot cheaper than what the insurance would cost to not have the deductible.

I think people that complain about funding a deductible have no idea how much they actually pay to not have it. In my office we have a low deductible option, it is around 350 a month single, 900 a month family. Now look at that rationally, that is 10,800 just for the insurance, that doesn't count your copays. Yet to fund the full deductible is just 3,000! My employer pays the same for each plan so this is the actual difference. Kind of a no brainer.
Looking at JBs response I would have to wonder if those amounts are before or after the contractual write down. You still get the benefit of accepted and allowed. I say that because a pediatrician visit, with shots, was only 115 after the write down.

In a nut shell doctors bill at this strange amount which all has to do with government programs, won't bore you with it but to get back to actual costs you write down the bill. An example would be my ACL reconstruction, it billed at 62,000 but after the write down it was 17,000. It is crazy but true.

2 moms found this helpful


answers from Pittsburgh on

I did some research on this in the spring for myself. I don't think you will reach the deductible in either case if all you have are routine visits. I called my family's doctors, and found that my annual Ob/Gyn appt -$300, visit to the doctor (mine or the ped) - $150. Typical rates for Quest bloodwork are between $40-$150 per test, if you need to get annual cholesterol and that kind of stuff.

To me, the real question is: if you have an emergency and have to pay out the $10,000 deductible, will your bank account be able to handle it? If you don't have this much in there, then pay up the extra $1800 for the lower deductible. You don't want to end up bankrupt because you chose a plan with a deductible higher than you can afford.

2 moms found this helpful


answers from San Francisco on

We are in the same boat. Our small business rates are so astronomical that I'm practically doing backflips at the idea of signing up through the California Health Insurance exchange next month. It looks like our premiums will go from $1450/month to $750/month - party at my house! :)

Anyway, I am choosing the lower premiums/ higher deductible. My reasoning is that usually, like you, we just have our yearly exams, and maybe an occasional sick child visit, but most years we will not meet the deductible. Even with the lower deductible, we probably wouldn't meet it.

So, part 2 of my plan is that we have a credit card with a higher limit than our deductible. In the event that we ever have some catastrophic event that requires us to meet the very high deductible, we do have a way to pay that deductible immediately (the credit card, which is forever offering 0% interest for 12 months or whatever), and then we would have 12 months to pay back the deductible, if we needed to.

The other thing you should look at is the "stop loss" amount on the policy. That is the total amount out of pocket that you can pay per year - and that is actually a different number than the deductible. This is because in a normal year, you would end up paying some co-pays, which do not count toward your deductible, and even once you've met your deductible, you could still have co-pays. So the stop-loss amount is the amount after which 100% of your expenses would be covered by the insurance company.

Anyway, I hope that helps. Good luck!

1 mom found this helpful


answers from Dallas on

We have the $10,000 deductible. Fortunately, we have never hit the deductible or even come close. But we have crunched the numbers (every year since we started this plan 7 years ago) and the math works in our favor. For the most part, we rarely go to the doctor. When we do go between the discounted rates and parts that are covered and the lower monthly bill, we come out ahead. A big part of it for us, is we do have the money in savings should something catastrophic happen and we need it.

1 mom found this helpful


answers from Minneapolis on

If you are buying your own insurance, make sure you check out the prices on the new exchanges ( the ACA or Obamacare) which will be up on 10-1-13 for plans to start 1-1-14. If their prices are better, I would do a short term plan now until the end of the year.

As far as deductibles, it is a gamble either way, just make sure you can manage the deductible if someone needs a lot of health care. I know too many people who have delayed needed care because they could not afford to pay up to their deductible amount.

1 mom found this helpful


answers from Dallas on

We own our company and we have private insurance. It is just hubby, daughter and myself. I pay about $1200 a month for basic medical and catastrophic, disability. Our deductible is $10,000 and we have NEVER hit it in the 5 yrs we've had this plan. In all honesty, we never hit any deductible even when we were covered through hubby's previous employer.

Thankfully, we are an overall healthy family and only go to the Dr. for preventative care which is sometimes covered at 100%. I paid less than $1000 for my complete hysterectomy about 10 yrs ago and part of that was an upcharge for a private room.

Now this year, I have had an ankle issue and the treatment for my ankle is not FDA approved or covered by insurance. SO, I paid out of pocket for the procedure (platelet rich plasma) which involves growth hormone and stem cells (many injured pro athletes do this without the growth hormone and recovery time is superb). The insurance has covered a portion of the Dr. office visits and x-rays but did not cover crutches and ankle braces.

Now get this and see if you can make sense of it.... I had to have an MRI on my ankle. I was told by the MRI office that "my portion" would be $1250 and they would submit the rest to the insurance OR... If I chose to, I could pay $400 cash out of pocket and be done with the whole thing. Of course, I went the $400 route.

I've had roughly $2000 worth of procedures the I paid out of pocket and does not go toward my deductible but that made a lot better sense financially. I am trying NOT to have to go through surgery which would be more costly and more recovery time.

Also, a lot of Dr's will honor cash price discounts. We do this with dental. I keep a good amount of $ on our account and they give us a cash discount. We do not carry dental insurance as we feel it is not worth it. Many procedures are not covered at all OR are only covered with specific materials used and 50% at that (ex: porcelon crowns, tooth colored resin fillings, etc). By the time you add up premiums, it is not worth it so we keep a balance on our account for cleanings, etc. When we got daughter's wisdom teeth out, we paid cash 48 hours before the surgery and received over 10% discount because they don't have the hassle of dealing with insurance companies. Just a thought on that one.

We do not do the Flexible Spending accounts. We do keep enough on hand to cover us when needed and if the worst happens, we are well covered with the catastrophic portion of the policy.

I hope that helps. The insurance decisions are not easy ones to make and there is no one insurance or deductible that is good for everyone. We all have different circumstances. Good luck

1 mom found this helpful


answers from Chicago on

We have a 5k deductible and we've hit it every year for the last four. We did have babies in two of those years, and off years hubby and my son needed surgery.

If we old do a 10k, I'd switch to that since we are one having kids.



answers from Wausau on

Our plan has a $6000 family deductible to be met. We're not even close to meeting it. We have an HSA to save up pre-tax money to pay any medical bills. (The 2013 HSA family contribution limit is $6,450.)



answers from Seattle on

Depends on whether you have any chronic conditions or if you are planning more babies. If you intend to have another baby definitely choose the lower deductible - chances are that you will max it out.
Otherwise go with the higher deductible and max out your FSA with the savings (or put the saved premium into a savings account for emergencies).

Good luck.



answers from San Francisco on

I always think of it like this - IF something catastrophic happens, can I meet the deductible and the out-of-pocket thresholds and still be able to support myself. I try to figure out how much I would need to pay out over the course of a year before the insurance kicks in and go with the plan that would allow me to still survive IF I had to lay out that money. So, for me, the lower deductible policy would be what I would chose.



answers from Detroit on

If you are basically healthy.. go with the higher deductible plan. and put some of that extra money in a health savings account for when expensive things happen.

we have a 3,000 family deductible.. which we never ever meet. except this year.. my son fell and went to ER for stitches.. so 1300 later.. we met the dedutible. of course we only met it cause it was toward the end of the year and we had so many sick dr visits this year (influenza, strep... etc)

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