When Bronze Is Better Than Gold: High Deductible Insurance Plans Better For Young Families

13 November 2014

Mia Nelson

Choosing health insurance can be stressful for young families especially when the employer offers two or three different group health insurance plans. Many people look at the bottom line when choosing insurance, and if you are interested in the same, then you should choose a high deductible plan.

Gold, Silver or Bronze

We are not talking about the Olympics, but about how insurance policies are ranked. High deductible plans are usually considered the "Bronze" option when you are looking at insurance. This doesn't mean that your policy is less desirable; it simply has to do with how you pay for it. 

With a bronze plan the insurance company pays for about 60% of your care, while you pay for 40% out of pocket. In comparison, the gold plan has the insurance company pay 80% of the medical costs, while you pay around 20%.

Monthly Premiums

Monthly premiums are the first cost associated with healthcare. You will have this amount taken from your paycheck every month whether you are in need of medical care or not. This is not part of the sixty or eighty percent paid out by the insurance company.

Every insurance plan is different, so you will need to check the actual figures on your own policies. However, as an example, a Gold plan may cost $1,100.00 per month while a Bronze plan would cost $650.00 

That means that every year you are paying $13,200.00 in insurance premiums for a Gold plan and $7,800.00 in premiums for Bronze plans. That is a difference in $5,400.00 expenses out of your pocket over the course of the year.

You need to look at your health and see if you think the savings from lower premiums counteract the high deductible from the Bronze plan.

Deductible

The next cost that comes with insurance is the deductible. This is the amount per person and per family that must be paid before the insurance completely kicks in. A Gold plan will have a low deductible, around $1,000.00 per family member or $2,000.00 for the entire family. That means that no single person will have a deductible over $1,000.00, and once the entire family pays the $2,000.00 the deductible has been met.

The Bronze deductible is much higher. Each person may have a deductible around $3,500.00 and the family deductible is $7,000.00.  The difference between the two plans is $5,000.00.  However, if you look at the premiums, you see that the Bronze plan has still saved you $400.00.

Making the Choice

Choosing insurance is a bit of a gamble. However, if your family has a history of good health then you should thoroughly consider getting the Bronze group insurance plan. You may not pay all of the deductible, and then you would end up with more money in your pocket at the end of the year.

You also need to consider how well you manage your money. The Bronze plan will give you $450.00 extra each month. If you can set it aside in a health account to use in case you need to pay the deductible you will be fine. However, if that money just gets spent of trivial things, you may find yourself scrambling to pay the deductible in case of a health emergency.

Once you consider your physical health, things such as Fiscal Fitness, and your money managing skills, you will be able to choose the right health plan for you and your family. 

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