Deductible
Deductibles are typically used to deter the large number of claims that a consumer can be reasonably expected to bear the cost of. By restricting its coverage to events that are significant enough to incur large costs, the insurance firm expects to pay out slightly smaller amounts much less frequently, incurring much higher savings. As a result, insurance premiums are typically cheaper when they involve higher deductibles. For example, health insurance companies offer plans with high premiums and low deductibles, or plans with low premiums and high deductibles. One plan may have a premium of $1,087 a month with a $6,000 deductible, while a competitive plan may have a premium of $877 a month with a $12,700 deductible. The consumer with the $6,000 deductible will have to pay $6,000 in health care costs before the insurance plan pays anything. The consumer with the $12,700 deductible will have to pay $12,700.
High-deductible health plan
The proposed American Health Care Act of 2017 could result in higher deductibles (or total out-of-pocket cost) to consumers and leave 23 million Americans without insurance, according to the Congressional Budget Office. The Trump Administration is proposing to nearly double the maximum HSA contribution for a family from $6,750 to $13,100 annually. An increase in HSA contribution limits will provide little benefit to the low-income households, which already find HDHPs to be less affordable in the event of a catastrophic illness. One method to entice consumers to pursue HDHPs is low- or no-cost wellness benefits, which provides the insured with better access to preventive care visits and tools at lower cost. If successful, these plans may support the ongoing shift from curative to preventive health care.