Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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The lowdown...

  • Health insurance is designed to protect individuals and their families from financial devastation in the event of a health condition that requires medical attention
  • Covered medical care can vary from hospital stays or complex surgeries to simple doctor or dental visits
  • You will have to put a side a certain out-of-pocket amount you will use towards your medical care before your health insurance takes over, this amount is called the deductible
  • The deductible can raise or lower your health insurance premiums depending on how it’s set. However, some plans have no deductibles
  • Besides the deductible, some other factors will affect your monthly premiums when shopping for health insurance

Some factors affect health insurance premiums. These factors help the health insurance provider measure the cost of providing coverage for an individual and adjust to appropriate premiums. When you purchase a policy and pay the premium, you reduce your chances of having to pay for medical care with your own money.

The Affordable Health Care Act requires all American citizens to carry health insurance, failure to which they will be subjected to tax penalties. When you purchase a health insurance policy, you’ll have to set a deductible. You are required to pay the deductible every year when you use your coverage to pay for a covered medical expense.

Find health insurance with deductibles you can afford by comparing online quotes today. Enter your zip code above to get started!

What is a deductible?


This is the amount of money you will have to chip in towards your healthcare before your health insurance begins to cover the costs. Depending on your policy, the deductible can fall anywhere between several hundred dollars to thousands of dollars. Not all plans come with a deductible, though. Most health maintenance organization plans don’t necessarily require a deductible.

Many people have a hard time trying to choose the right health insurance plan due to the wide array of available options, especially when it comes to Marketplace policies.

Understanding how low and high-deductible plans factor into your monthly premiums as well as out of pocket costs can help you make the right health insurance plans.

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Things You Need To Know About the Deductible


The deductible will affect your health insurance premiums. A low deductible will result in higher health insurance premiums, and a higher deductible will lead to lower premiums. To the insurer, a higher deductible means that you are willing to pay more towards your medical expenses and save the company money. The health insurance provider will, in turn, return the favor with lower monthly rates.

High Deductible Plans allow policyholders to hold pre-tax savings in their health savings account (HSA). Having high deductible health insurance coverage qualifies you to reserve given an amount of pre-tax earnings for use in case of a medical emergency.

Your employer may also chip in to increase your HSA savings especially if your insurance is under your employment group plan. The money deposited to your HSA is directly deducted from your income before tax. Therefore, HSA reduces your tax burden besides helping you save money for medical expenses.

High deductible plans are recommended for healthy persons in general, with no kids. Health insurance deductibles differ from other types of deductibles in the sense that a health insurance deductible doesn’t have to be met to receive medical care. Other types of insurance homeowner’s and auto require policyholders pay the deductible before receiving the settlement cheque.

Types of Health Insurance Plans and How They Affect Deductibles


When shopping for health insurance, you can opt for private health plans from insurance providers, or you can go to the federal or state marketplace. You will get income-based subsidies on premiums in the marketplace plans.

Compare different plans and opt for the one with the most benefits. You will find a carrier directory that shows all the clinics and doctors participating in the plan’s network.

If you are purchasing a policy via your employer, obtain the summary of benefits from your company’s benefits administrator. Otherwise, you will find provided links that will direct you to the plan’s benefits. You also see the plans price besides its title.

When shopping for health insurance plans in the marketplace, carefully consider your family’s health needs. Look at their medical history and how frequently they visit the hospital. These trends can help you make the right choice.

Health Maintenance Organization (HMO) Plans

An HMO plan will present you with a vast array of preventative health care services through a network of providers who have agreed to offer these services. To join an HMO, you must choose a PCP (Primary Care Physician) who will cater to your medical needs whenever there’s need for such.

You will have to get a referral from your PCP to see a specialist. Health maintenance organization plans have lower co-payments, and members are not required to pay a deductible. However, you are not covered to receive medical care from doctors out of your provider network.

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Preferred Provider Organization (PPO)


Unlike in an HMO plan, you don’t need to select a primary care physician (PCP) to join a preferred provider organization. You don’t even need any referral to see a specialist; you are free to refer yourself to any specialist in your network.

In some cases, you will be allowed to visit a doctor out of your provider network, but at a higher cost. You can see any specialist that you want to see, within or without your provider network, but you will have to get permission first, or you will foot the entire bill. As a member of a PPO, you will be required to pay an annual deductible.

The Bottom Line


Compare rates and benefits and select the best plan for you and your family. If nobody needs to make regular visits to the doctor or has a history of serious health problems, an HMO plan (no deductible) is a viable option for you.

On the other hand, if you or someone in your family has a history of serious health problems, a PPO (has a deductible) plan is the best fit for you. However, nobody can predict the occurrence of health complications with 100 percent accuracy. Therefore, it is always a good idea to choose the most comprehensive health insurance coverage you can.

Enter your zip code below to compare health insurance prices and policies in your state today!