The deductible is one of the topics that people ask about most often when it comes to health insurance. That’s because the deductible is one of the most confusing things out there. Make no mistake, many health insurance companies like it that way because the less information that a customer has, the less able they are to make the right decision when it comes to choosing the deductible that will fit their budget. Insurance companies make money by betting that you will have to pay more than they will and an educated consumer can put the odds in their favor if they do their research.
What is a Deductible?
The first thing you need to understand is exactly what a deductible is. A deductible is the amount of money you will have to pay toward your medical bills before your insurance company starts covering them. This doesn’t apply to everything, but it usually does apply to unexpected medical procedures such as visiting the emergency room or having surgery. For things like regular physicals, dental exams, teeth cleanings, prescription medications and standard costs that insurance companies can anticipate, you may not have to make your deductible but instead, pay what is known as a copayment.
The deductible is based upon the plan you choose. With plans that have low deductibles, any medical procedures you have done the insurance company will likely be paying the majority of. Other people prefer to have a high deductible so that they can pay a lower premium every month but still be covered just in case there is a major emergency in they are not responsible for weeks or months of medical bills. Whichever way you go will be up to you, but just keep in mind that you have to pay those medical bills until you reach your deductible before the insurance company will start either paying the doctor or facility directly or reimbursing you for paying it.
How Can your Deductible Vary?
Your deductible varies based upon several factors. The plan that you choose is the most common reason that a deductible might vary. Different plans will have different deductible amounts. However, there are other things to be aware of as well. For example, you might have a deductible that only applies to certain types of services. For example, you may have to meet a deductible only on your prescription medication. That means that you have to pay for your own medication for a period of time until you meet the threshold, after which you may or may not have to pay an additional co-pay whenever you pick up medication.
Another factor to consider is that your deductible can vary based upon the number of people covered in your plan and the person that is using the benefit. For example, with some health insurance plans, your deductible might apply to the entire family while others will apply to each individual person within the family. This is definitely something you want to understand beforehand, prior to your signing up for that particular health insurance plan. Make sure that you get all of the information you can before you decide on which plan to have because you can’t change it until the next window.
How to Meet Your Deductible
Meeting your deductible will depend upon the type of medical procedures that you get and the specifics of your plan. Some people make sure that they meet their deductible when they have the money to cover it if they know that they have surgery or some other medical expense coming up later in the year when they won’t be able to pay for it. This allows for the insurance company to pay for it instead and prevents late fees and other problems. In order to meet your deductible, simply check your policy to find out how much your deductible is and what medical services will count towards it. If you choose elective surgery, the amount that you pay will probably not count towards your deductible. It is for covered procedures only.
The Bottom Line
The bottom line is the understanding your deductible is an important part of using your health insurance correctly. It starts with choosing your plan based upon your deductible. If you know that you can afford a higher monthly payment and that you will have trouble paying thousands of dollars on medical expenses when they come up, then a lower deductible is preferred. Once you have figured out how much you need to pay, then you can plan for those medical expenses and be covered for anything else that crops up down the road. Understanding your policy thoroughly is one of the best ways to make sure that you save as much money as possible on your premiums, deductible, and overall medical costs.