Health Insurance Deductible

By: EconomyWatch Content   Date: 15 February 2010

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Health insurance deductible is the amount of money that one needs to pay towards treatment before getting the medical coverage from the insurers. In practical terms, it is the amount of money that needs to be paid after medical assistance and before the insurers pay their share, For example, if the deductible is $100 and the total bill is $1000, then the insured person must pay the $100 to get the coverage benefits.

 

The health insurance deductible has an inverse relationship with the amount of premium. The bigger the premium, the smaller the deductible gets and vice versa. This relationship is followed by the insurers to reduce their risk and strategically push people towards higher premiums and thus make more profits.

 

Health Insurance Deductible: Inquire Before You Buy

There are different types of deductibles applicable for different medical situations. There are many insurance plans that do not ask for any deductibles for doctors’ visits, although they levy deductibles for surgeries. Similarly, there are plans that offer discount on family plans, where rather than paying the deductible according to the number of people, there is a fixed amount, lesser than the conventional amount.

 

Therefore, one should inquire about the kind of deductible associated with the health insurance plan and compare it vis-à-vis the current financial situation.

 

Difference Between Health Insurance Deductibles and Co-payments

While a deductible is the fixed amount of money that needs to be paid for eligible medical situations to get the medical coverage, the co payment is the amount that needs to be shared with the insurer in the remaining bill.

 

While both are paid from the insured person’s pocket, a difference still exists. For example, a co payment of $50 may mean that no matter what the bill is, the person has to pay that amount as his share of the cover, even after the deductible has been paid. Therefore, a co payment can be understood as the share of the bill that gets eligible for coverage once the deductibles have been paid.

 

Therefore, while buying an insurance package, besides comparing the coverage amounts and the medical network, look at the health insurance deductible as well. The higher it is, the lower will be your premium. However, the coverage decreases significantly, while the out-of-pocket cost is higher.


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