About Long Term High Deductible Insurance

With the rising costs of medical care and health insurance plans, many are looking for ways to lower their insurance premiums. One way that many are choosing to save money on insurance is through a high-deductible plan. Getting a long term high-deductible plan can be beneficial for those who do not regularly need medical care, but it is not for everyone.

Lower Premiums

• One of the features of the high-deductible plan is that it has lower premiums than plans that have low deductibles. With this type of insurance, you essentially pay less on the front end. Then if you need medical care, you will have to pay for much of it upfront before the insurance company pays for anything. Once you reach the deductible amount for your policy, the insurance company starts paying for medical benefits up to your coverage limit.

Health Savings Accounts

• When you get a high-deductible health insurance plan, you can also qualify for a health savings account. A health savings account is a special type of account that you open with a bank, which can allow you to save money for medical expenses that you have to pay out of pocket. The money that you contribute to the health savings account is pre-tax. Then you can use a debit card attached to the account to pay for medical expenses.

Deductible Amount

• If you want to qualify for a health savings account, you must have a high-deductible plan according to the rules of the Internal Revenue Service. The rules of the IRS say that you must at least have a deductible of $1,200 if you have an individual health insurance plan. If you have a family health insurance plan, you must have a deductible of at least $2,400 before you can qualify for a health savings account.

Serious Illness

• The ultimate purpose of buying a long-term high-deductible health insurance plan is to protect yourself from the bills that come with a serious illness or injury. For example, if you have a heart attack and need open-heart surgery, the bill could easily be hundreds of thousands of dollars. In this case, you will only have to pay your deductible and the insurance company will pick up the rest. For smaller items, you will end up paying more out of pocket than with a low deductible plan.