Financial Planning for Generation X & Y Women
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Expert Q&A Archive

How high should I want my insurance deductible to be?
I wanted to ask about deductibles on the different types of insurance. How does one decide how high a deductible to choose? What are some of the factors to consider?
Gail V. Marquet:
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When considering a deductible on health insurance, consider how many doctor visits you anticipate, whether or not you plan on elective surgery, and other similar medical needs. If you are a healthy individual with minimal doctor visits and no anticipated elective surgery, you probably want to consider a higher deductible which will give you a lower premium (monthly payment). However, if you have extensive medical needs, you probably want to consider a low deductible.
Claudia James:
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Your risk tolerance is the number one consideration-can you financially tolerate a high deductible should you or your family members need coverage?
Anne Delle Donne:
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This will be a personal decision, but I would weigh heavily the exposure or risk you will assume if you have to pay the first $1,050 or $2,000 and up of medical expenses. If you have a cash reserve available to you, the risk of having to pay $2,000 for a couple of nights stay in the hospital is probably not great-you have planned for this type of emergency and have already built up your cash reserve. If you do not have cash reserves to speak of, you might consider a lower-deductible plan to start with until you either build up your cash reserves, or have deposited enough money into your HSA account to cover your deductible for the year. The premium cost of the policies is another consideration. What is the monthly cost to have this health plan, is there a significant savings opportunity in premium costs that you could then turn around and deposit into your HSA account? Also, after you have paid the deductible, how much does the insurance company pay for then? Some policies will only cover 75-80% of the covered medical costs after the deductible is met-you will want to evaluate this as well.