Question

What are the benefits to having traditional health insurance as opposed to high deductible insurance? What are the benefits on high deductible health insurance? What situations would one work better than the other?

Answer 1

Traditional health insurance- It is a basic health insurance plan that covers the doctor's consultation fee, surgery, operation, medical expenses and hospitalization.

High deductible insurance- This plan is also called High deductible health plan (HDHP). This plan contains lower premium but high deductibles. There should be deductible of at least $1350 for an individual that cannot exceed $6650 and minimum $2700 for family (figure in 2018).

Difference between Traditional health insurance and High deductible insurance

	Traditional health insurance	High deductible insurance
Benefits	You do not have facility of Heath saving account.	If you enroll in HDHP, you are also eligible to contribute to Health saving account. HSA pays the out of pocket medical expenses.
Premium	You need to pay higher premium.	You need to pay lower premiums.
Deductible	It has lower deductible	It has higher deductible.
Tax benefit	Only traditional insurance plan can be used as tax benefit.	HSA provides you higher and triple tax benefits. It is good for long term. Contribution recuses the taxable income and distribution for qualified medical expenses are tax free.
Better one	If you generally fall sick and your health expenses are more, you should choose traditional plan.	If you rarely fall sick and expenses on health are less then go for HDFP.