In today's world, there are a lot of questions about health care and health insurance. Of high importance to people when considering what health plan to for themselves and their family is one question: "How much will it cost me"? The answer to this question lies largely in your medical insurance deductible.
Definition
A deductible is an insurance concept that determines how much the insured is required to pay in the event of a claim against their insurance policy. When the deductible is paid, and how much it will be, depends on the type of insurance policy in question and the terms of that policy. Auto, home and health insurance all have different norms surrounding their deductibles and can vary greatly depending on policy specifics. No matter the type of your policy, it is important that you know the terms surrounding what you must pay when you claim against your insurance.
Types
Health insurance deductibles are different than most auto and home policies in that the deductible is typically charged up front and on a yearly basis. Sutter Health notes that deductibles can vary in value but often range from 200 to 500 dollars. Being charged your deductible on an annual term means that for the year of coverage in question, any expenses up to the amount of your deductible will be paid first by you. Once you have spent the value of your deductible on your health care, the insurance kicks in and will pay 100 percent of the remainder of your qualified expenses for the year up to a given amount. Health insurance policies usually also have different deductible terms surrounding regular doctor visits, emergency room visits and admission to a hospital for a serious conditions.
Variations
As with all types of insurance, there can be a large variation of terms, even between plans of the same type. There are, however, some general trends regarding if and how certain types of coverage address the issue of a deductible.
HealthInsurance.org defines types of insurance plans and their general terms. According to their summaries, deductibles are common in individual health insurance policies as well as preferred provider organizations, or PPOs. Health maintenance organizations, or HMOs, on the other hand, rarely have deductibles, and out-of-pocket payment is usually a matter of small copays for each visit to the doctor, up to the payment limits of the policy. After reaching the payout limit of the policy, the insured individual is then responsible for any further costs.
Details
Contact your insurer or refer to your policy to determine the terms of your deductible. It is very important to know in advance what you will be responsible for should you have to make a claim against your health insurance. Hospital stays are extremely expensive, and even a short admission to a hospital can result in bills of $10,000 and up. Know what will be expected of you for the different types of claims that can be made in the case of an injury or illness.
Other Options
The Kaiser Family Foundation describes high deductible health plans, or HDHPs, as a plan with a deductible usually exceeding $1,000 per year. This can expose the insured individual to large out-of-pocket expenses, but when paired with a tax-deferred flexible spending account, it can be effective in keeping low premiums without creating a financial burden on the insured in the event that there is a claim.
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