This is the question I got this week from a 22-year-old woman who just started her first job after college: like most young adults, she doesn’t go to the doctor very often, but recently went to the dermatologist who prescribed some medications for her acne. The prescriptions weren’t paid for by her insurance and were very expensive. She wondered why she should continue to pay for her employer’s health insurance if nothing was going to be covered.
We talked about her policy, and, of course, there was a deductible. Since she hadn’t gotten any healthcare services this year, she had not yet met her deductible. The medication was “covered” by insurance, but the cost of the medication went toward her deductible. So, she had to pay for the prescriptions out of her own pocket.
When she chose her health insurance plan, she picked the cheapest policy. She didn’t realize that one of the reasons why it was cheaper was because it was a “high deductible” insurance plan. It’s likely that most of her healthcare services this year won’t be paid for by the insurance company because of the high deductible. For our 22 year old, this might be a wise choice. She pays less per month and she is unlikely to need many healthcare services since she is young and healthy.
Even if you did not select a “high deductible” plan, many people are frustrated at the start of the year by the fact that a lot of healthcare services are not paid for by insurance due to the deductible.
What can you do? First, when you select an insurance plan, know what your deductible is. If your employer has a Health Savings Account (HSA) which allows you to put pre-tax dollars away to pay for healthcare services, it’s wise to put in at least enough to cover the deductible.
You might also want to consider choosing a lower deductible plan the next time you can change your plan. You need to consider the increase cost of the insurance vs. the lower deductible.
Planning ahead is the best solution so you do not have surprises like our 22 year old. At least now, she understands her insurance plan and knows what to expect.
Tell us how you choose your deductible? We’d love to hear from you!
For more information about your health insurance, see HealthSpin’s Easy Healthcare: Choosing Your Health Insurance.
We hope we’re helping you “Spin Your Healthcare Your Way!