Health insurance with no deductible is one of the most comprehensive forms of medical coverage. It is available for individuals, families, businesses and self-employed persons that purchase their own coverage and want little or no out of pocket expenses coupled with high-quality benefits. Although not all major insurers are able to offer a zero deductible plan, many states have various options either on or off the Marketplace.
Mostly available through employer-group plans, there are also some private contracts (Platinum Exchange plans through Open Enrollment) that offer first-dollar coverage. You can request free quotes on all types of plans at the top of this page. Immediate benefits are usually paid when you buy coverage. There also may be a “stated amount” of dollars paid for certain claims on non-compliant policies. Often, you will need secondary coverage with these policies since there may be high coinsurance or co-payments.
The most common form of this type of coverage is an HMO (Health Maintenance Organization) plan. Instead of the typical amount on large claims (often ranging from $500 to $10,000) sometimes, there is simply no deductible that is required to be met. Thus, a $10,000 bill resulting from a covered accident or injury, could possibly cost the insured very little…perhaps less than $2,500. Each HMO is different and there are many state variations.
Although there may be “daily copays,” these are usually capped after 4-7 days. Maternity benefits are also included on all Marketplace HMO plans, although there may be a separate small copay or other amount. Aetna, UnitedHealthcare, Cigna and many of the Blue Cross companies offer these types of policies. Sometimes “low” deductible options are offered with amounts of $250 or $500 available.
There are also non-HMO plans that will waive many costs. These PPO policies feature immediate benefits for large or small healthcare expenses, without having to meet an immediate copay or coinsurance. Virtually all stated expenses are covered at 100% regardless of the number of claims submitted. However, with any plan, there still could be specific exclusions that may not be covered, such as cosmetic surgeries.
Since these types of policies can get a bit pricey, especially in some of the Northeastern states, considering a small deductible (vs. no deductible) instead, may actually save quite a bit of money. For example, a $2,000 deductible vs. a $500 deductible could easily reduce the yearly cost of a family policy by as much as $2,000. So, if you were to have a few large claims per year (which is unlikely), you will still have more money in your pocket at the end of the year. And after many years, the difference could be dramatic.
New Marketplace Policies
Eliminating out-of-pocket expenses, including deductibles, copays and coinsurance, was very rare before 2014. Companies feared their customers would submit too many claims, with the insurer paying almost all of the claim. But that changed when federal tax subsidies, Open Enrollment, and Metal tier plans became household words. The $5,000 and $6,000 deductibles are still available but much lower options have become much easier to obtain.
Silver, Gold, and Platinum Exchange plans feature much lower out-of-pocket costs than Bronze and Catastrophic contracts. Often, a low-deductible option is available along with several policies that completely eliminate it. Although each state offers different policies, providers, and of course, prices, we’ll create a sample situation in Pennsylvania so you can better understand your options.
Large City Example
Our example assumes two married persons (both age 45) that live in Columbus (Ohio). They have two teen-aged children (ages 19 and 20) so there are four members of the family. The household income is $55,000. The federal subsidy is approximately $6,400 per year (Yes…It’s that large!) and instantly reduces the cost of coverage.
A Molina Marketplace Silver plan (includes cost-sharing) offers a low $1,700 deductible at $384 per month. PCP and specialist office visit copays are only $25 and $55 respectively. A $500 deductible option is available in the Gold-tier, although the monthly premium jumps to $592. A UnitedHealthcare Gold Compass plan is also available for $799.
Gold and Platinum-Level policies are the most expensive, but will minimize any cash outlay other than the premium. However, as previously discussed, often enrolling in a less-expensive plan (especially Silver-tier) are a more cost-effective choice.
Student Plans With Low Deductibles
For a student, rates are much less expensive. Assuming the same area of Ohio, a 21-year-old student with $18,000 of income, would only pay $74 per month (after the subsidy is applied) for the same Silver-Tier Molina policy with a $250 deductible. And Aetna offers a fairly similar plan for $92 although the deductible would increase to $1,000.
Depending on where you live and the school or University you attend, it may be possible to purchase a student-health plan with low out-of-pocket expenses at a reasonable cost. An inexpensive supplementary contract can help reduce unexpected accidental expenses. These types of contracts are often offered by the University to be used in conjunction with the primary coverage.
Fixed Benefit Policies – Warning
There is one particular type of health insurance we don’t endorse or recommend…unless you can’t qualify for any other type of medical insurance, you have been previously declined after submitting a short-term application, or you are either not eligible or missed Open Enrollment in your state. We are referring to a “Fixed-Benefit” policy, which is not offered by all companies. However, most of the carriers that offer this policy seem to be reputable and you do receive cash benefits for covered expenses.
Fixed Benefit medical plans are not always expensive. Often, the rate is less than $100 per month for a single person and less than $300 per month for an entire family. Of course, the older you are (especially if you are over age 55), the more expensive rates will become. For office visits, instead of a “copay”, often you received a “fixed” (of course!) payment in the range of $40-$75.
But usually there is a limit of 2-4 visits per year and it’s probable that the cost of the visit will be more. Sometimes it is difficult to find a doctor or specialist that accepts the carrier. The same may be true for hospitals.
Prescription benefits are either just discounted or have a maximum payout per year…perhaps $500 to $1,000. These are far lower benefits than you would enjoy under most other standard contracts. And it is very important to understand exclusions on these types of policies, because they are plentiful.
Fixed Benefit plans also limit inpatient and outpatient surgery coverage and related expenses. More than likely, if you use these benefits, you won’t have enough coverage. Emergency room and Urgent care benefits are often covered, but with very low amounts. The same applies to long hospital confinements which could result in large bills that are not covered. Depending on the severity of the confinement, it would not be unusual to owe tens of thousands of dollars in uncovered medical bills.
While choices like this have many gaps and limitations, if all other alternatives have been exhausted, the no-deductible health insurance plan should be considered. Missing Open Enrollment may force you to view these types of options. However, if you choose to purchase a policy, benefits will not come close to matching a standard Exchange contract.
Impact Of Legislative Changes On The Deductible
One important change is the mandated provisions and essential health benefits that became a requirement on most policies beginning in 2014. At that time, the “zero” or “no” deductible policies were mostly offered on “Gold” and “Platinum” options that were earlier discussed. That situation has not changed, although there are far fewer policies that now waive a deductible. However, there are many $250, $300, and $500 deductible options.
Each state has some variances, but the “Platinum” plan always offers the richest coverage. For instance, in California, several Platinum plans feature no deductible and a $2o copay for primary care physician office visits and $40 for specialists. But they are also the most expensive plans offered (Molina Healthcare 90 HMO, Health Net Platinum 90, and LA Care 90 HMO).The maximum out-of-pocket cost on these three policies is $4,000.
In Pennsylvania, there are many plans without a deductible including the UnitedHealthcare Gold Compass 0-1, UPMC Advantage Silver $0/$50, Keystone HMO Platinum, Independence Blue Cross Platinum Personal Choice (and Complete), and Keystone Gold. However, depending on the plan, you still may pay up to $6,850 in coinsurance costs.
Many other states only offer policies without a deductible, although that does not mean there are no out-of-pocket expenses. A “No Deductible” plan provides exceptional first-dollar coverage. But you must be aware of what comes next. Sometimes, even if you have major health problems, a higher deductible and lower premium combination may save you money.
November 2015 – For 2016 Marketplace coverage, the maximum out-of-pocket cost limit has increased to $6,850 and fewer plans are available with no deductible or extremely low MOP (maximum out-of-pocket expenses). Selecting a Silver-tier policy can often result in finding the “sweet spot” for price and out-of-pocket cost.