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.
Political positions of Donald Trump
Trump has cited the rising costs of premiums and deductibles as a motivation to repeal the Affordable Care Act. However, according to a study by the Kaiser Family Foundation, the after-subsidy premium costs to those with insurance coverage via the Affordable Care Act's exchanges did not change significantly on average from 2016 to 2017, as increases in the subsidies offset pre-subsidy insurance premium increases. For example, after-subsidy costs for a popular "silver plan" remained around $200/month in 2016 and 2017. An estimated 70% of persons on the exchanges could purchase a plan for $75/month after subsidies. Further, in the employer market, health insurance premium cost increases from 2015-2016 were an estimated 3% on average, low by historical standards. While deductibles rose 12% on average from 2015-2016, more workers are pairing higher-deductible plans with tax-preferred health savings accounts (HSAs), offsetting some of the deductible increase (i.e., lowering their effective deductible).