A health insurance deductible is the amount of money that the policy holder is required to pay before the insurance company will pay their part of a claim, bill, or expense. If you don’t pay your deductible, the insurance company will not pay their part. The following article will provide additional information on health insurance deductibles.
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What is the purpose of a health insurance deductible?
With health insurance deductibles being a necessary part of a health insurance policy it is important to know what the purpose of a health insurance deductible is. A health insurance deductible is a way for health insurance companies to off set expenses.
If health insurance companies were to take on all the medical expenses or policy holders, many would go bankrupt by the shear expense of it all. Deductibles take some of the expense off of the insurance company and put it on the policy holder.
By requiring a deductible, health insurance companies also put some of the responsibility onto the policy holder. Knowing that you have to pay a deductible before the insurance company will pay its part may help stop unnecessary appointments.
Some people tend to go to the doctor for even small aliments or illnesses. Some of these can be treated over the counter, the phone, or just by waiting. Though finances shouldn’t stop you from going to the doctor when necessary, a deductible may help you make wiser healthcare decisions.
It is important to note that a deductible is different than a co-pay. Co-pays are the amounts required at doctor’s visits, emergency room visits, for prescriptions, and other medical treatments. Some insurance companies will require you to make all payments for all medical treatments until the deductible is met, then co-pays kick in. Other insurance companies require co-pays from the beginning, while simultaneously paying down the deductible.
Since the purpose of a health insurance deductible is to defer some of the cost of health insurance, it is important that you have the money for your deductible when it is needed. You can put the money aside in a savings account or put the money aside another way. However, be sure to have the money when needed. If you do not pay your deductible, the insurance company will not pay their part of the claim.
How much are typical deductibles?
The amount of your deductible is often up to you. The rule of thumb is the higher the deductible, the lower your monthly premium payment. So, if you are seeking lower health insurance rates then a higher deductible may be part of your answer. However, there is a lot to consider before choosing a high deductible just to save money on a monthly premium.
Asking yourself questions like how often do I and my family go to the doctor, does anyone on the plan have a chronic health problem, is anyone on the plan on prescription drugs, and other questions that assess the overall health needs of everyone on the plan can help you decide what type of deductible to go with.
Some insurance companies have one deductible amount that must be met no matter what the medical need. Other insurance companies have varying deductibles. This means that there are different deductible amounts for different medical situations. For example, a deductible for hospitalization might be $1,500 while a deductible for prescription drug coverage might be $250. In these cases, understanding your different deductible requirements is very important.
What deductible should I choose?
When assessing what amount to choose for your deductible, consider how much money you have available to put towards the deductible and how much money you have in your budget to pay your monthly premium. With these two things in mind, you can make a decision as to what deductible to choose.
Keep in mind that in some cases, the deductible may not be up to you. It may be determined by your insurance company or your employer, if you have insurance through your job.
Finding the right deductible amount only comes after you find the right insurance company. Looking for an insurance company can be overwhelming with so many different health insurance companies to choose from. However, using an online insurance rates tool can help make your decision process faster and easier. An online comparison tool will show you rates and offer you quotes from several top companies side by side.
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