What does a deductible mean and why do you still have to spend money when you go to a doctor if you pay for insurance every month?
What are the other fancy words I need to know?
How do you know if something is a good deal?
In: 399
It varies from provider to provider, but IN GENERAL…
You pay either a monthly fee, or a little bit out of each paycheck.
There’s often a co-pay for service at the doctor, $15, $25, $100 are common.
Any remainder bill is sent to insurance.
A deductible, on any insurance, is how much you have to pay before the insurance pays ANYTHING.
Some insurance plans have a high deductible, some low. If yours is $2,500, that means you pay the first $2,500 of any bill before insurance pays anything.
If the bill is $1,800, you’re paying the whole thing. If it’s $2,530, then you pay $2,500 and insurance figures out what to do with the $30.
Some plans are 80%/20% meaning of the insured bill, they only ever pay 80% of it.
So with a $2,530 bill, a $2,500 deductible, and 80/20 insurance, you’re paying the first $2,500, and 20% of the remaining $30, so another $6.00.
On top of that, there’s an out of pocket maximum for the year, once you have spent that, your 80/20 plan converts to a 100% plan.
So take my story for example… I landed in the hospital for 7 days in January, 2019.
My annual out of pocket maximum was $6,500 and I hit that virtually instantly.
All the rest of my health care for 2019 was covered at 100%.
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