I’m currently shopping for health insurance and have no idea what a deductible means. I looked it up several times and I just have no idea what it means at all.
In: Other
If your deductible is 100 bucks, and your total medical bills comes out to 1000, you pay 100, and the insurance pays 900. It’s the amount you need to foot directly, basically.
If your bill is less than a 100, you cover all of it, because your insurance only kicks in when it exceeds the deductible.
The deductible in health insurance is the amount of money you have to pay out of your own pocket before the insurance company starts covering medical costs. For example, if your deductible is $100 and your medical issue costs $500, the insurer will pay the remaining $400. Generally, health insurance with a lower deductible will have a higher monthly cost.
Premium = pay this to have access to insurance
Deductible = pay this for medical service before we will pay
Coinsurance = A % that you will still pay after deductible
Copay = You pay this much and we pay this much (per item and this is usually not along with coinsurance)
Out-Of-Pocket Maximum (OOPM) = The most you will have to pay out of pocket (usually broken into individual and family)
Be careful with OOPM because it doesn’t always work the way you think. There is an “individual” and a “family” OOPM for most plans. The ideas are related but not the same. If you had an individual OOPM of 500 and your family OOPM was 2000 you do not reach the family OOPM once one person pays 2000 because they cannot get that far. Their individual maximum is 500 so their expenses after that are covered. The family deductible having an OOPM must be met collectively by the individual OOPMs. So if your family OOPM is $2k and your individual OOPM is $500 then you will need at least four members of your family to hit their $500 before your family will kick in. The function of the family benefit here is to help larger families. Say you had 6 kids and your individual was $500 and the family still $2000 – when you hit the $2000 for the family (having paid OOPM for 4 people fully) the rest of care for the family that falls in the terms of the coverage is then covered by insurance. So if you’re particularly in a small family this family number may not actually make a big difference to you if you know that the people in your family cannot have reached the family OOPM before everyone in the family satisfies the individual OOPM. All of these things are sort of confusing intentionally by the companies that release the plans.
It’s money you still have to pay out of pocket annually before the insurance really kicks in. So if you have a $2000 deductible, you’d need to spend $2000 in prescriptions, doctors visits, tests, etc. before insurance covers all/most of your care. That’s on top of your premiums. But before you hit your deductible, there are certain things that are covered like an annual physical and immunizations. And you may get a reduced rate for care prior to deductible kicking in. So you might see a doctor visit billed at $400 because you were sick, but the insurance negotiated rate is $280. So that’s what you’d owe, not the $400. But say you needed an MRI that ran $2000, then anything after that would be covered by your rate of coverage after your deductible, typically something between 80% and 100%. If 100%, then your out of pocket max and deductible are the same, otherwise you might have something like a $4000 out of pocket max meaning the insurance pays 80% and you pay 20% on care until you’ve paid $4000 out of pocket and then they’d pay 100%. So you blow out a knee playing basketball, and hit your $2000 deductible on a doctor visit and MRI, surgery is $50k but you pay $2000 toward that while your insurance company pays the balance.
Latest Answers