No-Deductible Health Insurance: What Is It And How Does It Work? (2024)

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

A no-deductible health insurance plan doesn’t have a deductible, which means lower out-of-pocket costs when you need care, but those plans generally come with higher premiums. They’re also not nearly as common as health plans with deductibles.

Health insurance deductibles have been on the rise over the past two decades as insurers have shifted more out-of-pocket costs onto members in an attempt to stabilize premiums. Although no-deductible plans have no deductible, they generally still have coinsurance, which is the percentage you pay for a healthcare bill, such as 20% to 40%.

Key Takeaways

  • No-deductible health insurance is coverage without an annual deductible.
  • No-deductible plans typically have higher premiums.
  • Health insurance without a deductible usually still has coinsurance like other types of coverage.
  • A no-deductible plan may save you money over the year if you regularly need healthcare services.

What Is a No-Deductible Health Insurance Plan?

A no-deductible plan is health insurance without a deductible. These plans are fairly rare. In fact, our analysis of nearly 800 health plans in the Affordable Care Act (ACA) health insurance marketplace found fewer than 40 plans with no deductibles across the country.

A no-deductible plan may benefit people who regularly see a doctor or have expensive prescriptions through lower overall costs, but it might not work for you if you’re healthy and don’t need much care. Though no-deductible plans come with lower out-of-pocket costs, these plans usually have higher health insurance premiums, so you pay more for coverage but less when you need care.

How Does a No-Deductible Plan Work?

With a no-deductible plan, you pay a premium to have coverage, just like other health plans, but you don’t pay a health insurance deductible when you need care.

No-deductible plans typically have coinsurance, which is standard in other plans. Coinsurance is a percentage of a healthcare bill that you pay after receiving care. For instance, if your coinsurance is 40%, you pay that amount of the bill while the insurer pays 60%.

That means if you see a doctor and the bill is $200, you’d get a bill for $80, while the health insurance company would pick up the remaining $120.

In most health plans, coinsurance kicks in after you reach your plan’s deductible. But with a no-deductible plan, coinsurance begins at the start of your plan.

You pay coinsurance until you reach your plan’s annual out-of-pocket maximum. Health insurance marketplace plans have those maximums, which is the most you’ll pay for in-network care in a year. If you reach that maximum, the health plan picks up 100% of the in-network costs for the year.

Average Cost of Health Insurance With No Deductible

The average cost of a no-deductible Affordable Care Act health insurance plan is $586 monthly for a 40-year-old. That’s compared to the overall average of $509 monthly for an ACA plan for a 40-year-old. That means you would pay about $80 more per month or about $1,000 a year on average for a no-deductible plan compared to the overall average of an ACA plan.

No-Deductible Health Insurance Monthly Costs by Age

AgeNo-deductible health planAverage ACA health plan
21

$456

$397

27

$484

$419

30

$522

$453

40

$586

$509

50

$820

$712

60

$1,243

$1,079

You should compare the overall health insurance costs when choosing between health insurance with no deductible or a plan with a deductible. For instance, if you pay $1,000 more for a no-deductible plan in premiums and your other options have $2,000 or $3,000 deductibles, going with a no-deductible plan makes sense if you regularly use healthcare services.

Let’s examine how a person who needs regular healthcare services may benefit from zero-deductible health insurance. In this example, we estimated the person accrues $5,000 worth of healthcare service costs for the year.

How You May Benefit From Having No Deductible

No-deductible planHigh-deductible plan

Deductible

$0

$2,000

Annual premium

$7,200

$4,800

Healthcare service cost for the year

$5,000

$5,000

Coinsurance percentage

40% from start

40% after deductible

Coinsurance and deductible costs over the year

$2,000

$3,200

Potential savings for choosing a no-deductible plan

$1,200

No-deductible health plans aren’t for everyone, though. If you rarely need healthcare, you may benefit financially from choosing a high-deductible health plan (HDHP). Let’s look at how someone who doesn’t need healthcare often and only accrues $500 worth of healthcare services in a year.

How You May Not Benefit from Having No Deductible

No-deductible planHigh-deductible plan

Deductible

$0

$2,000

Annual premium

$7,200

$4,800

Healthcare service cost for the year

$500

$500

Coinsurance percentage

40% from start

40% after deductible

Coinsurance and deductible costs over the year

$200

$500

Potential savings for choosing a high-deductible plan

$2,100

How To Get No-Deductible Health Insurance

No-deductible health plans may be available on the ACA marketplace, or your employer may offer them as part of its health insurance offerings. No-deductible plans aren’t common. You’re more likely to find a high-deductible plan with lower premiums than a no-deductible plan.

To look for a no-deductible health plan on the marketplace:

  1. Enter information onto the ACA marketplace site: Go to the website and provide your information, such as ZIP code and annual household income, which may influence Obamacare costs. Entering the income will allow the marketplace to see if you’re eligible for premium tax credits or cost-saving subsidies. ACA plans are the only type where you can get those savings.
  2. Compare health plans: The ACA marketplace lets you compare available health plans in your area side-by-side, including health insurance quotes.
  3. Look for no-deductible plans: Check out each plan’s deductible. No-deductible plans typically aren’t offered, so there’s a chance you won’t have that option.
  4. Look for low-deductible plans: If you don’t have a no-deductible option, see if there are low-deductible options. You may find a plan with an annual deductible under $1,000, which may still save you money over the year if you select a plan with low premiums.
  5. Choose a plan: Once you find the best plan for you, select the plan on the ACA marketplace website. You’ll need to pay your first health insurance premium before coverage begins.

What Are the Advantages and Disadvantages of No-Deductible Health Plans?

Similar to any health plan, no-deductible health plans have benefits and drawbacks.

Advantages

  • You don’t have to pay a deductible, which can save you money over the year.
  • Not having a deductible may reduce financial barriers to getting care since deductibles can cause people to delay care.
  • Only paying coinsurance may prevent you from facing a high medical bill, which can happen when you have a deductible.

Disadvantages

  • Higher premiums mean you pay more to have coverage.
  • High coinsurance percentages like 40% may result in paying more over the year–even without a deductible.
  • May not benefit healthy people or those who rarely go to the doctor or don’t have costly prescriptions.

Alternatives to No-Deductible Coverage

You have other options for getting health insurance coverage. Alternatives include:

  • Low-deductible health insurance.
  • High-deductible health insurance.
  • Point of Service (POS) plans.

Low-Deductible Health Insurance

A low-deductible health plan may be your best bet if you’re looking to minimize your deductible pain. Low-deductible health insurance includes plans with a deductible under $1,000.

Once you reach your deductible, coinsurance typically kicks in, which is when the health plan picks up a portion of the costs, and you pay the rest. Choosing a low-deductible health plan with low premiums and low coinsurance levels, such as 20%, can be a way to save money over the year if you regularly see doctors.

High-Deductible Health Insurance

High-deductible health insurance (HDHP) is a plan with a deductible of at least $1,600 for single coverage or $3,200 for family coverage. HDHPs are common in the ACA marketplace and in employer-sponsored group health insurance.

High-deductible loans also usually come with a health savings account (HSA), which lets you save for healthcare costs tax-free. Companies often contribute money to the HSA if you have an employer plan.

HSAs roll over into the next year, so you don’t have to spend all the funds that year. You can instead use it as a long-term savings account for your future healthcare needs.

HDHPs usually have lower premiums than other health plans. They can be an excellent choice for healthy people, but a plan with a high deductible might get expensive if you need many healthcare services in a year.

Point of Service (POS) Plans

Point of service (POS) insurance is a type of health plan that lets you get out-of-network care, though you pick up more of the costs than if you got in-network care. Depending on the plan, in-network care may come with no deductible in a POS plan. That means as long as you stay in the plan’s provider network, you can get the same benefits found in a no-deductible plan.

POS plans require you to get primary care referrals to see specialists. In that way, they’re similar to health maintenance organization (HMO) plans but with the benefit of getting out-of-network care if needed.

POS plans aren’t common. Our analysis of nearly 800 ACA plans found fewer than 20 POS plan offerings across the country. The average cost of a POS marketplace plan is $607 monthly for a 40-year-old. That average is similar to the cost of a no-deductible health plan, so they could be a good alternative to a no-deductible plan, as long as you stay in-network and your POS plan doesn’t have an in-network deductible.

Find The Best Health Insurance Companies Of 2024

Learn More

No-Deductible Health Insurance Frequently Asked Questions

Is a no-deductible insurance plan right for me?

No-deductible insurance may be a good decision if the plan doesn’t have exorbitant health insurance premiums.

Choosing health insurance is a balancing act of comparing premiums with out-of-pocket costs like deductibles and coinsurance. Whether you’re comparing a plan with or without a deductible, it’s wise to compare all health plan costs when choosing a plan.

What do no-deductible plans cover?

No-deductible plans cover everything usually found in other health insurance plans. For instance, no-deductible plans on the Affordable Care Act health insurance marketplace must cover the so-called 10 essential health benefits in the ACA. That includes doctor visits, outpatient care, hospitalization, prescription drugs and mental health services.

Getting a no-deductible plan doesn’t mean sacrificing coverage found in plans with deductibles. Instead, it just means that you don’t pay a deductible, though you may pay higher premiums and coinsurance.

What does no charge after deductible mean?

No charge after deductible health insurance means the health plan pays 100% of the in-network healthcare service costs after you reach your deductible for the year. Those plans have a deductible but no coinsurance. Catastrophic health insurance is an example of a plan without coinsurance.

Health insurance plans typically have coinsurance, which is a percentage of the healthcare services bill that you pay after reaching your deductible. The health plan typically pays a percentage of your bill after you get past your deductible.

No-Deductible Health Insurance: What Is It And How Does It Work? (2024)
Top Articles
Latest Posts
Article information

Author: Tuan Roob DDS

Last Updated:

Views: 6272

Rating: 4.1 / 5 (42 voted)

Reviews: 81% of readers found this page helpful

Author information

Name: Tuan Roob DDS

Birthday: 1999-11-20

Address: Suite 592 642 Pfannerstill Island, South Keila, LA 74970-3076

Phone: +9617721773649

Job: Marketing Producer

Hobby: Skydiving, Flag Football, Knitting, Running, Lego building, Hunting, Juggling

Introduction: My name is Tuan Roob DDS, I am a friendly, good, energetic, faithful, fantastic, gentle, enchanting person who loves writing and wants to share my knowledge and understanding with you.