Is Zero-Deductible Health Insurance Right For You?


WRITTEN BY: Craig Sturgill

UPDATED: DECEMBER 21, 2022 | 3 MIN READ

As you’re shopping for health insurance, you may see plans that offer no deductible. Zero-deductible plans don’t require you to meet a minimum balance before the health insurance company contributes to your health care expenses. These plans typically have higher premiums, while high-deductible plans have lower monthly premiums. If you frequently require medical care or take several prescription drugs, no-deductible health insurance may be a good choice. Read more about zero-deductible health insurance below.

What is a no-deductible health insurance plan?

A health plan with no deductible means that you immediately receive the full cost-sharing benefits of your coverage. You won’t need to pay a specific amount out of pocket before the insurer starts to cover your medical services.

For example, if you have a covered medical expense that costs $1,500, a zero-deductible plan would mean the insurance company would pay their full rate starting from the first day of your policy. If you had the same medical expense and your health plan had a $2,000 deductible, you would pay the first $2,000 before the insurance company would contribute.

How do health insurance deductibles work?

You pay a deductible for covered medical services before your insurer covers the cost. For your insurer to start sharing your healthcare costs, you must pay 100% of your deductible. For example, if your health plan has a $1,500 deductible, your insurance company won’t help with your covered medical expenses until you’ve paid $1,500 in medical services.

What’s the difference between zero-deductible health plans and other plans?

The difference between zero-deductible health insurance and other health insurance plans is that the insurer pays for covered medical services. With zero-deductible plans, cost-sharing starts immediately, but with other health plans, it starts after you pay out of pocket to reach your deductible.

A no-deductible health insurance plan is similar to other plans with deductibles, as there are some out-of-pocket costs and other standards. Here’s how health insurance deductibles work:

  • Higher Monthly Premiums: No-deductible plans will have higher monthly rates than other health plans, but the full cost-sharing benefits will kick in on the first day of the policy.
  • Policy Exclusions: Even if you enroll in a no-deductible health plan, you could still be fully responsible for covering out-of-network care or uncovered healthcare services. Check your plan for exclusions and the provider network.
  • Health Care Payments: In addition to high monthly premiums and possible exclusions, you’re also responsible for copayments or coinsurance: the portion you pay for services. You’ll also have an out-of-pocket maximum: a cap on your in-network copays and coinsurance costs each year.

What does an individual no-deductible plan cover?

What each individual no-deductible plan covers depends on the insurance company and plan. However, every health insurance plan covers essential benefits, although levels and costs will vary. These basic treatments and services include:

  • Chronic Disease Management: Certain diseases, such as diabetes, require regular maintenance and screenings.
  • Emergency Services: If a patient is experiencing a medical emergency, coverage can include visits to the emergency room, specialty care services, or trauma centers.
  • Hospitalization: Also known as inpatient care, hospitalizations typically require a patient to stay overnight. Hospitalization includes maternity and newborn care and can consist of labor, delivery, and prenatal services.
  • Lab Tests: This coverage includes X-rays, urinalysis, blood tests, and more.
  • Outpatient Care: This refers to healthcare services and procedures that do ’t include an extended stay in the hospital.
  • Prescription Drugs: While some plans have a separate prescription drug deductible, some pharmaceutical medications legally require a medical prescription to be dispensed.
  • Preventative Treatment: Annual checkups, screenings, and physicals are all considered preventative treatments as they screen for potential issues before they worsen.

What should you consider when choosing insurance without a deductible?

A no-deductible health insurance plan could fit your needs if you anticipate high medical costs for the year. While the plans don’t have deductibles, they tend to have higher monthly premiums than other plans on the market. If you’re exploring no-deductible health plans, consider the following factors before Open Enrollment.

Expected medical costs

Estimate how much health care you may need in the upcoming coverage year. If you’re older or have ongoing medical problems, a no-deductible plan may benefit you more, as it will cover your medical services without you needing to meet a deductible. However, if you only anticipate routine doctor visits, remember that most plans off full preventive care coverage regardless of deductible.

Impact on finances

Enrolling in a no-deductible plan can protect you from expensive medical bills and out-of-pocket costs, but these plans usually have higher monthly costs. If you prefer lower monthly payments, high-deductible health plans (HDHPs) offer cheaper premiums but higher out-of-pocket expenses.

Predictable costs

No-deductible plans generally mean your healthcare costs will be more predictable and easier to budget. You’ll pay a fixed price for your copayments and monthly premiums, which can help reduce stress surrounding any unexpected medical bills.

What should you look out for when choosing no-deductible health insurance?

While shopping for no-deductible plans, you may spot a monthly rate that seems too good to be true. Many of these plans are offset by higher costs elsewhere. Look for potential pitfalls, such as a limited provider network, limited coverage options, high copays, and high doctor visit costs.

Is no deductible insurance right for you?

No deductible health plan premiums are usually higher than other health insurance policies, but it can be a good choice for those anticipating high medical costs. No deductible or low-deductible plans can alleviate the out-of-pocket costs, but you’ll pay a higher monthly premium upfront.

Zero-deductible health insurance may be a good fit if you:

  • Are currently pregnant or planning to become pregnant
  • Have a chronic illness
  • Take expensive prescription drugs
  • Have a condition requiring frequent doctor visits or procedures
  • Need a major surgery in the future

Zero-Deductible Health Insurance FAQs

What is a $0 deductible in health insurance?

A zero-deductible health insurance plan means enrollees receive the full cost-sharing benefits of the plan without first meeting a deductible.

Is it good to have a $0 deductible for health insurance?

If you require regular medical care or anticipate spending a lot on healthcare, zero-deductible health insurance may be a good choice as the cost-sharing benefits begin immediately.

What is the benefit of a $0 deductible health plan?

If you require frequent care or take expensive prescription drugs, a zero-deductible plan may be more cost-effective than other health plans.

What is the difference between a $0 deductible and a $500 deductible for health insurance?

If you have a no-deductible health plan, your plan will pay for your covered medical services immediately. If you enroll in a health plan with a $500 deductible, your policy won’t help with your covered medical expenses until you’ve paid $500 in medical services.

Find an insurance plan with no deductible

Whether you opt for a health insurance plan with no deductible or another health plan such as an HMO or PPO, you need a health insurance plan that meets your medical needs and budget. Our team of insurance experts is here to help. Find out more about zero-deductible health insurance plans by getting a free quote online.