According to healthcare.gov, a deductible is defined as the amount paid to cover health insurance services before the insurance plan starts to pay.
In the most basic sense, no deductible health insurance means that the policyholder does not have to provide any upfront payment to receive the health services covered by the plan. No deductible health insurance plans are often synonymously referred to zero-deductible policies.
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Health Insurance Deductibles
When the policyholder has a $2,000 deductible, it means the individual is responsible for paying the first $2,000 for the services covered by the plan.
Plans with lower deductibles typically require policyholders to pay higher premiums each month. Many family plans are designed with individual deductibles for each family member and a deductible for the entire group as well.
With no-deductible health plans, members do not have to worry about making an upfront payment every year.
With these types of plans, the insurer covers upfront payments to account for emergency care, doctor visits or other similar events. Policyholders with these plans typically pay more for insurance than policyholders with plans that include deductibles.
No-Deductible Plans in Practice
Many of the no-deductible plans are employer-based health insurance plans. With these plans, the higher cost passed down to the individual for not having a deductible is offset by the employer paying for part of the policy.
The employer-based, no-deductible type plans are situated at the opposite of the spectrum from the self-purchased, catastrophic plans generally associated with higher deductibles for policyholders.
Finding a zero-deductible healthcare plan may prove to be difficult to find for some individuals. These policyholders are often required to compromise or sacrifice on different aspects of the plan in order to eliminate the deduction.
No-deductible health insurance plans are actually unavailable in a number of states and employer group health insurance plans.
Understanding No Deductible Plans
Insurers charge higher rates for zero-deductible plans because these policyholders have less incentive to hold their limit their medical expenses than those paying higher deductibles for services.
Insurers have learned through research that policyholders will attempt to limit their out-of-pocket expenses in order to stay within their deductible limit.
In order to reduce the organization’s responsibility cost-sharing is used for the following:
- policyholder’s healthcare costs
Cost-sharing with No Deductibles
- lab procedures
- doctor visits
Other no-deductible plans will offer co-insurance, designating a predetermined percentage of the healthcare services costs that the policyholder is obligated to pay.
Policyholders with these types of plans may pay 20 percent for medical providers on the network list and 50 percent for treatment from anyone outside the network.
Coverage with No Deductible
Policyholders with no-deductible healthcare plans may have certain conditions of choice, as defined by insurers, excluded from coverage, such as tobacco cessation treatments or pregnancy.
People with no-deductible plans are also likely to have limits on the out-of-pocket costs spent on co-insurance. When there are no out-of-pocket costs, copayments may not be excluded when totaling these expenses.
Policyholders with overall deductibles on their healthcare plan may have no-deductible coverage on different portions of the policy, such as vision, dental care or prescription coverage.
Policyholders may benefit from checking the difference between premiums to see if no-deductible coverage on certain sections of the policy could prove to be beneficial.
Evaluating No Deductible Plans
Health insurance plans with no deductibles may be especially appealing to people who are prescribed a number of medications or visit physicians on a routine basis.
For these people, eliminating higher upfront costs and the minimum balance needed to receive contributions from the insurer for healthcare expenses is worth the higher premium payments.
The specific needs and budget of the household typically dictate whether or not zero-deductible plans are an appealing option.
Insurance plans with high deductibles are typically most appealing to people who are generally healthy. People who don’t anticipate getting hurt or using healthcare services frequently typically prefer paying the lower monthly premiums associated with higher deductibles.
The high-deductible plans may also offer eligible policyholders the opportunity to set aside a limited amount, pre-taxes, in a Health Savings Account.
Considering No-Deductible Insurance
No-deductible health insurance plans are out there, but they certainly are in the minority. Depending on the state or insurer, zero-deductible healthcare plans may not be available.
However, when no-deductible options are available, these plans are typically most advantageous for people who need healthcare services frequently or those that can’t afford the minimum payment required for some policies.
Compare health insurance policies to find the one that’s best for you.