Les Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Written By Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Deputy Editor, Insurance Ashlee Valentine Deputy Editor, InsuranceAshlee is an insurance editor, journalist and business professional with an MBA and more than 17 years of hands-on experience in both business and personal finance. She is passionate about empowering others to protect life's most important assets. Wh.
Ashlee Valentine Deputy Editor, InsuranceAshlee is an insurance editor, journalist and business professional with an MBA and more than 17 years of hands-on experience in both business and personal finance. She is passionate about empowering others to protect life's most important assets. Wh.
Ashlee Valentine Deputy Editor, InsuranceAshlee is an insurance editor, journalist and business professional with an MBA and more than 17 years of hands-on experience in both business and personal finance. She is passionate about empowering others to protect life's most important assets. Wh.
Ashlee Valentine Deputy Editor, InsuranceAshlee is an insurance editor, journalist and business professional with an MBA and more than 17 years of hands-on experience in both business and personal finance. She is passionate about empowering others to protect life's most important assets. Wh.
| Deputy Editor, Insurance
Updated: Jul 10, 2024, 5:25am
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
Getty
A no-deductible health insurance plan doesn’t have a deductible, which means lower out-of-pocket costs when you need care, but those plans generally come with higher premiums. They’re also not nearly as common as health plans with deductibles.
Health insurance deductibles have been on the rise over the past two decades as insurers have shifted more out-of-pocket costs onto members in an attempt to stabilize premiums. Although no-deductible plans have no deductible, they generally still have coinsurance, which is the percentage you pay for a healthcare bill, such as 20% to 40%.
Key Takeaways
A no-deductible plan is health insurance without a deductible. These plans are fairly rare. In fact, our analysis of nearly 800 health plans in the Affordable Care Act (ACA) health insurance marketplace found fewer than 40 plans with no deductibles across the country.
A no-deductible plan may benefit people who regularly see a doctor or have expensive prescriptions through lower overall costs, but it might not work for you if you’re healthy and don’t need much care. Though no-deductible plans come with lower out-of-pocket costs, these plans usually have higher health insurance premiums, so you pay more for coverage but less when you need care.
With a no-deductible plan, you pay a premium to have coverage, just like other health plans, but you don’t pay a health insurance deductible when you need care.
No-deductible plans typically have coinsurance, which is standard in other plans. Coinsurance is a percentage of a healthcare bill that you pay after receiving care. For instance, if your coinsurance is 40%, you pay that amount of the bill while the insurer pays 60%.
That means if you see a doctor and the bill is $200, you’d get a bill for $80, while the health insurance company would pick up the remaining $120.
In most health plans, coinsurance kicks in after you reach your plan’s deductible. But with a no-deductible plan, coinsurance begins at the start of your plan.
You pay coinsurance until you reach your plan’s annual out-of-pocket maximum. Health insurance marketplace plans have those maximums, which is the most you’ll pay for in-network care in a year. If you reach that maximum, the health plan picks up 100% of the in-network costs for the year.
The average cost of a no-deductible Affordable Care Act health insurance plan is $586 monthly for a 40-year-old. That’s compared to the overall average of $509 monthly for an ACA plan for a 40-year-old. That means you would pay about $80 more per month or about $1,000 a year on average for a no-deductible plan compared to the overall average of an ACA plan.
You should compare the overall health insurance costs when choosing between health insurance with no deductible or a plan with a deductible. For instance, if you pay $1,000 more for a no-deductible plan in premiums and your other options have $2,000 or $3,000 deductibles, going with a no-deductible plan makes sense if you regularly use healthcare services.
Let’s examine how a person who needs regular healthcare services may benefit from zero-deductible health insurance. In this example, we estimated the person accrues $5,000 worth of healthcare service costs for the year.
No-deductible health plans aren’t for everyone, though. If you rarely need healthcare, you may benefit financially from choosing a high-deductible health plan (HDHP). Let’s look at how someone who doesn’t need healthcare often and only accrues $500 worth of healthcare services in a year.
No-deductible health plans may be available on the ACA marketplace, or your employer may offer them as part of its health insurance offerings. No-deductible plans aren’t common. You’re more likely to find a high-deductible plan with lower premiums than a no-deductible plan.
To look for a no-deductible health plan on the marketplace:
Similar to any health plan, no-deductible health plans have benefits and drawbacks.
Advantages
Disadvantages
You have other options for getting health insurance coverage. Alternatives include:
A low-deductible health plan may be your best bet if you’re looking to minimize your deductible pain. Low-deductible health insurance includes plans with a deductible under $1,000.
Once you reach your deductible, coinsurance typically kicks in, which is when the health plan picks up a portion of the costs, and you pay the rest. Choosing a low-deductible health plan with low premiums and low coinsurance levels, such as 20%, can be a way to save money over the year if you regularly see doctors.
High-deductible health insurance (HDHP) is a plan with a deductible of at least $1,600 for single coverage or $3,200 for family coverage. HDHPs are common in the ACA marketplace and in employer-sponsored group health insurance.
High-deductible loans also usually come with a health savings account (HSA), which lets you save for healthcare costs tax-free. Companies often contribute money to the HSA if you have an employer plan.
HSAs roll over into the next year, so you don’t have to spend all the funds that year. You can instead use it as a long-term savings account for your future healthcare needs.
HDHPs usually have lower premiums than other health plans. They can be an excellent choice for healthy people, but a plan with a high deductible might get expensive if you need many healthcare services in a year.
Point of service (POS) insurance is a type of health plan that lets you get out-of-network care, though you pick up more of the costs than if you got in-network care. Depending on the plan, in-network care may come with no deductible in a POS plan. That means as long as you stay in the plan’s provider network, you can get the same benefits found in a no-deductible plan.
POS plans require you to get primary care referrals to see specialists. In that way, they’re similar to health maintenance organization (HMO) plans but with the benefit of getting out-of-network care if needed.
POS plans aren’t common. Our analysis of nearly 800 ACA plans found fewer than 20 POS plan offerings across the country. The average cost of a POS marketplace plan is $607 monthly for a 40-year-old. That average is similar to the cost of a no-deductible health plan, so they could be a good alternative to a no-deductible plan, as long as you stay in-network and your POS plan doesn’t have an in-network deductible.
