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Large Deductible v.s. Small Deductible
The common wisdom is that it will cost you less to go to the hospital if your health insurance policy has a low deductible rather than a high deductible. Sometimes the common wisdom is wrong. The following is an example of how a typical hospital visit for a forty year old female in Houston, Texas would cost less with a $2,500 deductible than a $500 deductible.
Less Cost More
| Plan A | Plan B | |
| Hospital Bill | $20,000 | $20,000 |
| Deductible | $2,500 | $500 |
| Balance | $17,500 | $19,500 |
| Coinsurance | $0.00 | $3,000 |
| You paid | $2,500 | $3,500 |
| Annual Insurance Premium | $2,300 | $3,600 |
| You paid Total | $4,800 | $7,100 |
| Total Savings | $2,300 |
| Plan A | Plan B | |
| Annual Deductible | $2,500 | $500 |
| Coinsurance | 100/0 | 75/25 |
| Coinsurance Max | $0.00 | $3,000 |
| Doctor visit copay | none | $25 |
| Premium monthly | $191 | $300 |
| Premium annual | $2,300 | $3,600 |
Hey, wait a minute! Plan A does not have a doctor visit copay. That means I have to pay the doctor bill when I go to the doctor. That is right. But since doctor visits are a "covered expense" on Plan A, you get the network discount.
A typical office visit of $100 is "discounted" to $50. You pay $50. The typical person goes to the doctor twice a year. You would pay $100 for two office visits with Plan A or $50 with Plan B. Since Plan A cost $1,300 less per year than Plan B (with a $25 copay), you pay the $100 out of your $1,300 savings. You still save $1,200 per year.
This is how More Deductible ($2500 deductible) is better than Less Deductible ($500).
