When shopping for health insurance, you may come across terms like “no-deductible” or “zero-deductible” plans. These plans promise to save you money on medical costs by allowing you to eliminate the obligation to pay an upfront deductible. However, is $0 deductible health insurance really a good choice for you? In this article, we’ll discuss the pros and cons, and costs associated with zero deductible health insurance so you can make an educated decision on your healthcare coverage.
What is a No Deductible Health insurance plan?
Zero deductible plan is another term for a no deductable health insurance plan which removes the traditional requirement of a deductible. What that means is that once your plan starts, you don’t owe the full cost of medical services until your insurance begins to pay. However, the insurer is really sharing the costs for your care from the very start.
For example, if you need to go in for a $2,500 medical procedure, a zero-deductible plan will pay a portion of the bill up front, without having you put a full $2,500 dent in your wallet upfront. Instead of that, however, with a plan that has a deductible, you would first pay, say, $1,000 before insurance kicks in to cover the balance.
What is a No Deductible Health Insurance Plan?
Zero deductibles plans starting from the beginning of the split of the healthcare costs between you and the provider of the insurance. Your plan doesn’t make you pay a deductible first before your plan starts to cover parts of your medical expenses. But you’ll still have to pay a copay or coinsurance for medical services, and this depends on which kind of plan and how much protection.
Here’s a quick breakdown of how no-deductible health insurance works:
Upfront Costs: Monthly premiums are higher on no deductible plans because you’re essentially paying for immediate coverage.
Co-pays and Coinsurance: You will not pay the deductible, but may be subjected to copay (flat fee per service) or coinsurance (percentage of the bill).
Out-of-Pocket Maximum: When you’ve spent the maximum amount of money for your plan the insurance company pays 100 percent of the cost of your medical expenses.
When should you opt for a no deductible plan?
In particular, no-deductible health insurance plans are particularly advantageous for people who expect to use a great deal of medical care or would like a little certainty in their medical costs. The plan’s upfront benefits and ability to save on large medical bills can outweigh the higher monthly premiums, particularly if you fall into one of the following categories:
You Need Expensive or Ongoing Medical Care: But if you have a chronic illness or need to go to the doctor regularly, buying a no deductble plan may end up being cheaper over time. For this situation, plans such as Gold or Platinum level coverage are the perfect plan since they offer extensive coverage and lower out of pocket cost.
You Want to Avoid Large, Unexpected Medical Bills: A no deductable plan is a good option if you don’t want to risk being financially burdened with sudden medical expenses which mean your insurance will begin contributing to your bills immediately.
You Want Predictable Costs: If you would rather have a more predictable healthcare budget, zero deductible plans help you predict your monthly and annual medical costs and avoid surprises from a big deductible.
When to Not Select a No Deductible Plan?
Zero deductible health insurance plans are great, but not for everyone. A high deductible plans may be cheaper — if you’re healthy, have some savings to cover unexpected bills, or expect occasional medical visits.
For example:
If You’re Healthy: If you’re in reasonably good health, and anticipate not needing much medical care, choosing a no deductible plan may not make sense considering the extra cost. A Silver plan with a middling deductible might be as good as it gets, at a lower price.
If You Can Afford Large Medical Bills: With savings or an emergency fund, you might even be able to keep your premiums down lower on a monthly basis and pay the deductible when it’s necessary.
The Price of No Deductible Health Insurance Plans
If you’re considering a zero deductable health insurance plans one of the big factors in play is the cost. Typically, these plans offer a higher monthly premium than traditional plans with deductible. Silver no-deductible plans are on average $588 per month, about 2% more than similar, but otherwise untamed, plans.
Here’s a breakdown of average costs for different coverage levels:
Bronze: $477 per month (5% higher than average)
Silver: (2% more than average) $588 per month
Gold: $662 per month (1% more than average)
Platinum: $918 a month (no increase, as a lot of Platinum plans already have 0 deductibles)
So, some of those extra premiums that come with zero deductibles may actually be more expensive, upfront. But if you require regular or expensive medical care, the long run savings may make those plans more inexpensive.
$0 Deductible Health Insurance Pros and Cons
Pros:
Immediate Coverage: One of the biggest benefits to zero-deductible plans is it frees you from having to pay unnecessary high out of pocket costs for medical care.
Lower Unexpected Costs: Getting rid of the deductible makes it less likely that your bills will get very high and unmanageable, especially if you have a high deductible plan.
Better for Frequent Care: A no deductable plan gives you better financial protection than traditional plans if you need ongoing care and/or have specific medical needs.
Cons:
Higher Monthly Premiums: But, you’ll end up paying more each month for zero deductible plans, slowly but surely.
Potentially High Copays: Even though the deductible is waived, copays and coinsurance may remain, and there is much to pay at individual medical visits.
Limited Coverage Options: While some no-deductible plans may have limited networks or higher copays for certain services, you may still pay unexpected costs when you go see a provider in their network, all because of the zero deductible.
What to Look For When Picking a Plan
When deciding whether a no-deductible health insurance plan is right for you, there are several factors to consider:
Your Health Status: If you know you are going to have some pretty major healthcare waits to pay, then a zero deductible will do better with financial protection.
Financial Situation: If you do have savings for potential medical costs, you can consider going with a higher deductible plan, which may be a better deal in the long run.
Insurance Costs: Check out the monthly premiums, co pays, and out of pocket max to determine which plan will work best for you on a financial and medical basis.
Conclusion:
Is $0 Deductible Health Insurance a Good or Bad Thing?
The question of whether $0 deductible health insurance is good or bad is a question of what your needs if you have to go to the hospital and what financial situation you are in. If you get frequent medical care or just don’t like being surprised with unexpected bills, a no deductable plan can be great for that peace of mind and long term savings. Instead, if you’re happy and healthy or can bear to pay higher medical costs, you may find a traditional high deductible plan with its cheaper premiums and more freedom to be a better option.
However, in the end, it’s important to know what you need, budget wise, and medically wise before you decide on the best health insurance for your circumstances.
