The Pros and Cons of High-Deductible Health Insurance Plans

Health insurance plans that have high deductibles are often referred to as catastrophic policies. In most cases, they have yearly deductibles of at least $1,000. However, some can offer deductibles of up to $10,000 annually.

In some cases, a high-deductible health insurance plan may allow the insured to receive preventive care before the entire deductible has been met. In other cases, no services will be paid for until the annual deductible is met. There are pros and cons to these types of insurance plans. For example:


Typically, the higher the amount of the plan’s deductible, the lower the premium will be. In the case of younger and healthier individuals, this option may make sense, as they will not need to allocate a high amount of premium toward their health insurance plans. When used in combination with a health savings account, an insurance plan with a high deductible can even allow individuals to set money aside with various tax benefits.


A high-deductible plan could be the wrong choice for some – primarily those who may not have the needed funds to pay the deductible if services are needed from the policy. In addition, for high-deductible plans that don’t offer preventive care, even a basic doctor visit could end up costing the insured several hundred dollars. In many cases, this amount would have to be paid by the insured until the entire amount of the annual deductible has been met. A high-deductible plan may also require an insured to pay more for prescription drugs.