The $500 You Pay vs. the Deductible You Don't

I want to compare two numbers that sound similar but aren't. On one side, the $500 you pay per health event with health sharing. On the other, the deductible you carry with most insurance plans. People mix these up all the time, and the difference is worth real money and a lot less stress. Let me lay it out the way I wish someone had for me.

What a deductible really is

A deductible is the amount you pay out of your own pocket before your insurance starts helping. If your deductible is $8,000, you pay the first $8,000 of your covered care yourself. Every year. And a lot of family plans run even higher than that. I wrote up the full plain-English version of what a deductible means.

Here's the part that stings. You pay your monthly insurance bill the whole time, and you still owe that whole deductible before the plan pays a dime. You're basically paying twice until you hit the number.

What the $500 member commitment is

With CrowdHealth, the service I use, you pay $500 per health event. Not per year. Per event. A health event is one thing that happens to you, like a broken wrist or an appendix that has to come out. You cover the first $500 of that event, and the community funds the rest of the eligible bill.

So the honest comparison isn't $500 versus $500. It's $500 per event versus thousands, sometimes five figures, before your plan kicks in.

Let's put real numbers on it

Say your kid breaks an arm. Total bill, after the cash price and the advocates work it down, comes to $4,000.

• On a high-deductible plan with an $8,000 deductible: you pay the entire $4,000 yourself, because you never even reached your deductible. Your plan pays nothing. You also paid your monthly premium all year for the privilege.
• On health sharing: you pay $500. The community covers the rest of the eligible amount.

Same broken arm. Wildly different number on your side of the table.

The honest asterisk

I'm not going to pretend it's all upside. The $500 is per event, so if two separate things happen in a year, that's two commitments. And because health sharing is not insurance, there's no legal guarantee your bill gets funded, though the track record is strong, with tens of thousands of bills funded. A deductible, for all its pain, is a contractual promise. That's a real trade-off, and you should weigh it with open eyes. I covered the trust question honestly.

The takeaway

A deductible is a wall you have to climb every year before your plan helps, and it's often thousands of dollars tall. The $500 member commitment is a small, known step you take per event. For a healthy family that mostly needs a backstop against the big stuff, that's a much friendlier shape.

Questions I get about this

Is the $500 per year or per event?

Per event. A health event is one thing that happens to you, like a broken wrist or an appendix out. If two separate things happen in a year, that's two $500 commitments. Even so, that's usually far less than one year's deductible.

Does a deductible reset every year?

Yes, every January. So you can pay your premium all year, hit your deductible in December, and start over from zero the next month. The $500 has no annual reset because it's tied to events, not calendars.

Is a deductible safer than the $500 commitment?

In one way, yes. A deductible, for all its pain, comes with a contractual promise and a hard yearly out-of-pocket maximum. Health sharing isn't insurance and has no legal guarantee, though the track record is strong. I cover that trade honestly in Can You Trust Health Sharing With a Big Bill?.

Want to see your own numbers side by side? Use my code NORMAL: check CrowdHealth (opens in a new tab). New members get their first 3 months at $99 a month with code NORMAL.

My family of four uses CrowdHealth and I really believe in the model. If you join through my discount link (opens in a new tab) (code NORMAL), you get your first 3 months at $99 a month, and Normaltown USA earns a referral bonus if you stick around. It costs you nothing extra, and I only refer you to things I would tell a friend about. Health sharing is not insurance, and nothing here is medical, tax, or financial advice.