Health insurance deductible

When you go shopping for health insurance plan for yourself or family, you first need to understand what is meant by the term deductible. A health insurance deductible is the amount you pay for covered health care services before your health insurance begins to pay. It is a form of cost-sharing between you and your insurance company. Deductibles range from a few hundred to thousands of dollars depending on the insurance policy. Some insurance plans, normally H.M.O have zero amounts of deductibles.

Here is how health insurance deductible works: Let’s say your health care plan has a deductible of $1000 and you incur medical and pharmacy bills of $1500. You will be required to pay $1000 first from your pocket before your insurer comes in to settle the remaining $500.

In health insurance, deductibles apply in an annual basis. In most cases, after you pay your deductible for the year you will be needed to pay a coinsurance until you reach your out-of-pocket maximum, after which the insurer pays 100 percent of any additional medical costs. Normally, the out-of-pocket maximum doesn’t exceed 50% of the insurance policy.

Insurance companies provide discounted rates to their customers. Therefore, paying out of your pocket to meet your yearly deductible reduces the overall medical costs considerably.

There is a wide array of options in the market today, and confusion may arise when comparing the different deductibles. The following information is important when choosing the right health insurance plan.

A health insurance deductible differs slightly from other types of deductibles. Unlike, home, renters, or autoowners insurance where providers demand that you pay your deductible first before they pay for any claims, some medical insurance plans meet medical expenses before you pay your deductible. These plans meet costs for services like doctor visits and prescription drugs.

Health insurance plans are classified as high-deductible and low-deductible plans depending on the monthly premiums you pay. The more premium you pay, the lower the deductible and vice versa.

A high-deductible health plan means that you are responsible for a huge portion of your covered medical expenses but you will benefit by paying lower monthly premiums. The disadvantage is that meeting the deductible could be overwhelming to most people given the high costs of medical services. This plan is suitable for people who are generally healthy.

For a low-deductible plan, the amount you are required to meet before the insurer kicks in is much lower and affordable. But the premium paid for this plan is much higher. The deductibles are usually less than $3000 for both family and individual coverage.

In some cases e.g. preventive care, no deductibles are required at all. All marketplace plans cover preventive care such as shots, screening tests and others.

It is wise to find out beforehand what the insurance provider covers without needing you to pay a deductible when choosing a health insurance plan. You will then decide how you want to balance out the health insurance deductible and monthly premiums.

Deductible health insurance

It is important to understand how deductible works in health insurance when choosing the right health plan for you and your family. You may have come across the terms deductible health insurance and got confused about what they really meant.

A deductible health insurance is the amount you pay for insurance-covered health care expenses before your insurance company begins to pay.

For example, if your deductible is $500 and your hospital stay expenses amount to $2000, you will pay $500 only from your pocket before your health insurance provider steps in and pays the remaining $1500. Basically, the deductible is the amount of money deducted from the total insured cost.

Deductibles work differently in health insurance. When you meet your annual deductible, the health insurance provider requires you to pay a coinsurance (another form of cost sharing) until you reach your out-of-pocket maximum. Then the insurance company steps in and 100% of the remaining cost. Usually, the out-of-pocket maximum amount does not exceed 50% of the insurance policy.

A deductible in health insurance is applied annually, because it is hard to limit the number of times you visit a doctor. It can either be a fixed amount of dollars or a percentage of the total cost of insurance depending on the policy.

It is way cheaper to have deductible health insurance. Normally, insurance companies negotiate discounted rates with the insurance providers. It means that the annual deductible you pay from your pocket will be a discount. This significantly reduces the overall medical costs.

A deductible health insurance is classified according to the amount of deductible you pay. Also, the deductible you pay determines the amount of premiums that you must pay monthly. It consists of a high-deductible and low-deductible insurance plan.

The high-deductible plan is characterized by a huge amount of deductible and lower premiums. When you choose this plan, you will be responsible for most of your medical expenses. The insurer will save a lot of money because they will pay a small percentage of the total insured medical costs. You will also benefit by paying lower monthly premiums. Some people may find this deductible to be immense and unaffordable.

With a low-deductible plan, the out-of-pocket amount is lower but the monthly premiums will be much higher. It is a suitable health plan for people with young families or those who need to see the doctor more frequently. For example if you suffer from a chronic illness.

Deductible health insurance differs from other insurance plans such as auto and homeowners insurance. They only compensate you for damages after you have paid the deductible.

Most health insurance companies provide benefits to their customers without having to pay the deductible at all. Also, all marketplace insurance plans cover preventive care such as immunization, prescription pills and others without requiring you to pay a deductible.

This information will help you decide which health plan is appropriate for you. Finally, it is advisable that you choose a deductible that you can afford.