How to handle high health insurance premiums

In the new season of Netflix comedy drama, “Beef,” Ashley, played by Cailee Spaeny, is hospitalized because of an ovarian cyst. The waiting area is dark, with gray decor and patients who look like they’ve been there for years. Ashley’s partner, Austin, played by Charles Melton, returns from the front desk with bad news: “You have a very high deductible – $5,000,” Austin says.

“Wow. Can we withdraw $5,000?” Ashley said. “What if it costs less? Do they give us the difference?”

“It’s different,” Austin replied.

That’s right — your deductible is the amount you need to pay before your health insurance kicks in. But the second season of the Emmy-winning series, which premiered April 16, highlights the general confusion. Just over 1 in 4 Gen Z adults can correctly identify the insurance term “deductible,” according to a 2024 survey from the National Association of Insurance Commissioners.

“Proponents argue that deductibles make people more careful consumers of health care, by avoiding unnecessary care,” said Miriam Straus, associate director at the Center for Health Law and Policy at the O’Neill Institute at Georgetown Law.

“However, many consumers may not realize that, with a high deductible plan, they could face thousands of dollars in health care costs,” Straus said.

Research shows that unaffordable deductibles can also harm health outcomes, Straus said. For example, he said, “among cancer patients, high deductible health plan coverage is associated with worse survival.”

In the ’90s and early 2000s, most health insurance plans didn’t come with deductibles, said Matthew Rae, associate director at KFF, a nonprofit health policy research organization. Today, that has changed: About 88% of workers with employer-sponsored insurance have a deductible, up from 55% in 2006, Rae said.

As medical services expand and costs rise, employers and insurers are turning to deductibles to limit use and lower their costs. Between 2005 and 2020, Rae said, “we saw a rapid increase in deductibles.” While that growth has slowed recently — largely because employers are realizing that higher costs can make programs completely unaffordable — that stability could be at risk if the labor market weakens further and cost pressures rise, he added.

“The $5,000 deduction doesn’t surprise me at all,” Rae said.

While some Affordable Care Act Marketplace plans can have deductibles higher than $7,000, most people pay less. In 2026, the market average deductible is $2,912, compared to $1,881 in 2014.

Meanwhile, those with employer contributions have seen their deductibles jump 17% over the past five years and 43% over the past decade, KFF research shows. About one in five of these workers now has a deductible of $3,000 or more for one job, Rae said.

“Even if it’s not $5,000, that puts people in a financial bind,” Rae said. “It shocks your budget.”

There are several ways to get your deductible, says Caitlin Donovan, executive director of the National Patient Advocate Foundation.

“It may be on your insurance card, and it may appear on your statement of benefits,” Donovan said. “If you have a patient portal, you should be able to go in and find it there, and how far away you are to meet it.”

If you haven’t, call your insurance company and ask, he added.

If meeting your deductible seems difficult, remember that “meeting your deductible is not necessarily the goal,” says Katherine Hempstead, senior policy officer at the Robert Wood Johnson Foundation.

Because of the protections spelled out in the ACA, certain preventive services with in-network providers must be covered for free, regardless of whether you’ve met your costs or not, Hempstead said. There are lists of those covered treatments and tests on Healthcare.gov. Some examples include vaccinations, lung cancer screenings, birth control and, in general, your annual physical exam.

If you’re young and healthy and rarely use your insurance, you may not need to meet the deductible, Donovan says.

But if, on the other hand, you have a chronic illness or high medical expenses, you may want to hit your deductible early in the year so that, later on, you can benefit from your savings, he said. If you can, schedule your more expensive services, like surgery, after your deductible is paid and your coverage is in full effect, Donovan says.

A high-deductible plan usually comes with a health savings account, flexible spending account or health reimbursement plan, he added. All three of these tax-advantaged accounts can make paying for your care less of a burden.

“Sometimes, you have to be a little more subtle,” she said.

If you haven’t gotten your deductible yet and are concerned about your upfront costs, do some research before booking a service or exam, says Patricia Kelmar, senior director of health care campaigns at PIRG, a consumer advocacy group.

“Prices for labs and imaging can vary greatly,” Kelmar said. “You can get a price upfront from your insurance.”

Try to avoid hospital tests because they can lead to facility costs, he added. If you’re offered a discount for paying cash for a service, it may not count toward your deductible, Kelmar said.

It’s also a smart idea to regularly review the progress you’ve made toward paying off your deductible, Kelmar says. You can see this information on your insurance provider’s portal.

“Sometimes there is a delay if your provider hasn’t sent the applications,” he said. “If you’ve had care recently, check to see if you got credit for what you paid out of pocket.”