Super high deductible – do I really have health insurance?

I am single and self-employed.  I have a $15,000 deductible on my health insurance plan.  Nothing gets paid for, year in and year out.  I often wonder why I bother to carry this insurance at all.  What am I really getting for my money? 

Paying Out Of Pocket

Dear Paying Out Of Pocket,

With such a high deductible, you will be paying your own medical bills most years.  You would have to have something truly terrible happen to spend $15,000 – like a stroke (average cost $15,000) or a heart attack (average cost $40,000). 

So it is logical that you are feeling unrewarded for your monthly payment to the insurance company.  But you are getting two things from having the plan:

  1. The insurer’s negotiated rates from the hospital, physician, and other service providers.
  2. An end point for your medical bills.

Even though you are paying your medical bills, you have an ID card from your insurer.  Make sure that you show this ID to your caregivers, because having it entitles you to the (presumably lower) rate that the insurer has negotiated with them.  You will pay the rate that the insurer has set up, rather than the rate charged to “private pay” or uninsured patients.  This may not feel like much of an advantage, but for different services, the insurer’s discount may be quite steep.

The second item is, potentially, much more valuable to you.  If you own a home, a vehicle, a business, or any other thing that has cash value (including cash), then the plan protects those things from getting seized to pay your medical bills.  You have to pay the first $15,000, which might mean that you have to sell some things or take out a loan.  But after that $15,000, you are done.  (The vast majority of high deductible plans pay all of your covered medical bills once you have spent the deductible.)

Since you would be in rough shape after a $15,000 (or more) medical extravaganza, having your home and bank accounts basically intact would be a real boon.  Before you drop the plan, think about whether you want to risk losing those things.  If you do not have assets, you are risking your credit score and your ability to buy a home in the future. 

In short, I would recommend keeping the plan.  It doesn’t feel like you are getting much for your money but you are getting something worthwhile. 

 

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Linda Riddell

About Linda Riddell

A published author and health policy analyst with 25 years’ experience, Linda Riddell's goal is to alleviate the widespread ailment of not knowing what your health plan can do for you.