High Deductible Health Insurance Is The Norm

It’s open enrollment season and based on a few responses I’ve read from listeners to my previous story I realized that you might not know that you don’t legally have to have medical insurance any longer. Moreover, high deductible plans might be best if you want health insurance. Consider the definition of a “high” deductible to you? The answer is somewhat relative but it’s also real. 

Here we are nine years into the Affordable Care Act and the only constant has been less affordable healthcare. Central to the affordability conversation is how high deductibles happened to be for the average plan. For 2019, the average health insurance plan carried a deductible averaging $1,350 per person. A new record high and for tens of millions of families unaffordable. 

According to the Kaiser Family Foundation, 40% of families can’t afford healthcare this year in large part due to the heavy costs associated with out-of-pocket expenses required before meeting deductibles. Over the past year, 64% of Americans said they at least delayed healthcare due to cost, of them, 44% have avoided healthcare altogether. As you take a look at the 2020 enrollment season, consider that the average family is spending $1,021 per month on health insurance costs. That’s over $12,000 per year. That’s not accounting for deductibles. I reviewed the new high-deductible plans that are set to be rolled out and found that the average catastrophic coverage plan will only cost 42% of the average comprehensive plan and carry a deductible that’s around $2,500 per person. That’s nearly $7,000 in savings per family if you’re willing to go along with the higher deductible that’s about $1,100 more per person. For most families, you would likely save around $3,000 over the next year using this approach. 

If you’re concerned about healthcare costs, this year will provide more options. Some of which could save the average family thousands of dollars over the next year. Also, while it’s a potential risk, it’s important to note that the Trump Administration has put an end to the enforcement of the individual mandate. If you don’t want health insurance, you don’t have to buy it and you won’t suffer a tax penalty. 

As an advocate of consumer price transparency in healthcare, I prefer money focused on medical care and not masked insurance expenses and policies we can’t afford to use. 

Photo By; Getty Images

 

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