Affordable Care Act

Does It Ever Make Sense to NOT Use Your Health Coverage?

Updated on December 19, 2019

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Generally speaking, the point of having health insurance is to use it when you’re sick or need to see the doctor.
However, there are some occasions when it may actually make sense to pay for medical care out of pocket rather than use your health insurance coverage.
Here are a few examples, but be sure to read the caveat below:

1. When the deductible year is almost over and you’re a long way from meeting it.

Your annual deductible probably resets every January 1. Now if it’s December 10th and you’re a long way from meeting your deductible but you need to see the doctor, it might make sense to pay cash.
 
First, find out how much you’d have to pay out of pocket if the claim is processed through your insurance. Then find out what your medical provider would charge for the service you need if you were to pay cash. Ask if any discounts are available for up-front payment. You may even want to shop around a bit as a “cash customer” to compare prices.
 
Paying cash can sometimes cost less out of your pocket than having the claim processed through the insurance company. Just remember, when you don’t use your health insurance coverage for a medical service, the money you pay out of pocket will not count toward your deductible.

2. When you’ve decided that you want to see an out of network provider.

With some health plans, out of network providers just aren’t covered at all. Other plans may provide you with a lesser amount of coverage when you see out-of-network providers.

Depending on your plan, if you’ve determined that you really want to see an out-of-network provider, there may be no point in having the claim processed through your insurer. You should ask the medical provider for a discount as a cash customer. Many will give you one.

3. When you can find a better price for your prescription drug needs.

Some health plans have affordable copayments for prescription drugs. Others may require you to fulfill a large deductible before the insurer will begin covering drugs. If you’re facing a large deductible, you may want to consider paying for certain drugs out of your own pocket rather than having them processed through your insurance company – especially if you’re nearing the end of the deductible year.
 
Money you pay out of pocket like this won’t count toward your annual deductible, but certain discount pharmacies or discount drug programs will occasionally give you a better cash price than what you’d have to pay when the claim is processed through your insurance.

Finally, here’s that caveat:

The examples above are only examples. Decisions like this are personal in nature. We generally don’t recommend that people not use their coverage to avoid paying toward their deductible, but we recognize there are occasions when it may make financial sense. The fact is that you never know when someone serious may happen. If it does, you’ll be glad for every dollar that you’ve already contributed toward your deductible already.

We’ll let you know when we publish anything new.