Everything You Need to Know About Health Insurance Deductibles
If you’ve ever felt confused about how your health insurance plan works, you are not alone. Contracts often include terms you are unfamiliar with, which can complicate things when it’s time for you to use your insurance.
Deductibles are a perfect example, as not everyone knows what they are and how they work. However, understanding your out-of-pocket medical costs, such as deductibles, is essential to manage your healthcare costs.
What are Health Insurance Deductibles?
A medical insurance deductible is a fixed amount you have to pay for your healthcare before your insurance begins to pay. Once your medical bills meet that amount, your copayment or coinsurance coverage begins.
Deductibles vary depending on your plan, but as a general rule, the higher your deductible, the lower your monthly premium, and vice-versa.
How Do Medical Insurance Deductibles Work?
Most health insurance plans require you to pay a pre-established amount towards your health care services before providing coverage, also known as a deductible.
Your insurance plan will detail which payments count towards your deductible and which services are covered before you meet the deductible. Alternatively, some programs can feature a deductible structure stating that your insurance won’t pay for any healthcare services until you comply with your deductible.
For example, let’s assume your plan’s deductible is $2,700. This means you will need to pay 100% of eligible healthcare expenses until the bills total $2,700. It may take several months or just one visit to reach that threshold. After this, you share the cost of medical services with your insurance company by paying coinsurance.
Other Important Facts You Need to Know About Deductibles
- Copayments do not count toward your deductible
- The deductible amount you need to pay can change from one year to another
- The deductible on your healthcare plan resets at the beginning of each calendar year, regardless of when you signed your insurance contract
- Eligible out-of-pocket expenses count toward your deductible
- Some programs have different deductibles for prescription medication
Remember, by law, insurance companies must cover the cost of some preventive medical services and screenings, such as:
- Blood pressure screenings
- Obesity screenings and counseling
- Certain types of cancer screenings
- Fall prevention
- HIV screenings
How to Choose a Deductible Plan That is Right for You
When choosing a health insurance plan, make sure to consider the deductible. Always select a plan that has a deductible you are comfortable paying and has a reasonable copay. Remember, the lower your monthly premium, the higher the deductible, so make sure you choose an insurance plan that fits your budget.
Take your time to compare health insurance companies and choose the one that provides the most benefits for you and your family. Additionally, always compare the terms of your copayment vs. deductible costs to ensure you don’t receive a bill for services you thought were covered.