Having a High Health Insurance Deductible is Better Than Being Uninsured

August 07, 2012

Before you light the torches and pull out the pitchforks, hear me out for four to five hundred words. A very common occurrence I deal with on an almost daily basis is people coming to the realization they cannot afford most health insurance plans. Keep in mind, the key word in that sentence is most.

I would like to be able to afford the premium cable package with every movie and sports channel I can think of, but I can’t. That doesn’t mean I’m not going to NOT have TV service in my house, does it? It could, but the biggest risk I run doing that is missing my favorite baseball team, the Cleveland Indians, or the latest “Storage War” that might be taking place.

A 30 year old male in good health could pay as little as $56-$75 a month for a $5,000 or $3,000 deductible on an individual health insurance policy in Ohio. While not a tiny sum of money, it’s a little more then what you would expect to pay for dinner for two at Outback Steakhouse.

It’s Better Than Nothing

The reason you are going to want to protect yourself with whatever deductible you can afford is because the cost of an emergency medical procedure can be far more devastating. A fairly routine procedure, like an appendectomy, could cost around $30,000. If you have insurance, and receive treatment at an in-network facility (emergencies are covered as in-network regardless of facility) your health insurance company will pay the hospital $25,000-$27,000 depending on what deductible you selected. You will only owe that hospital the $3,000 or $5,000 to satisfy your deductible. Since the hospital already has a cool $25-27k in their pocket, they aren’t going to be as concerned with collecting your $3-5k you owe them. In fact they will more then likely offer you a prompt pay discount or negotiate a payment plan. It is even possible for them to negotiate a flat rate lower than your deductible.

This is What Nothing Looks Like

However, if you were to have that same appendectomy without insurance, you would be responsible for paying the full amount of that bill. Under those circumstances, the hospital would be much more motivated to collect as much as possible from you.

Let’s say you decide you wanted to dine and ditch on your hospital bill. They can just write it off, hundreds of thousands of people receive “free” treatment in this country every day. Why shouldn’t you be one of them? While this a topic for another day, just know that free or charity care is one of the first actions in a series of events that continues the cost shifting of our health care system and is a main contributor to why you couldn’t afford the plan you wanted in the first place.

Sure the health insurance plan YOU want might cost more then you can afford. However, if you approach buying coverage with the right might set, you are receiving a level of protection that is invaluable when needed.

Do you think you can’t afford health insurance? Are you going to look at higher deductibles with a more open mind now?