Health Insurance Deductibles: 6 Things To Know
Nobody can predict their well-being in the future, and an unexpected visit to the doctor might ruin your finances if you do not have a good health insurance policy. A health insurance policy is a contract between you and the insurance company where you agree to pay premiums (a monthly fee), and the company agrees to pay your medical expenses. This arrangement will help you pay for necessary treatments and surgeries, no matter how expensive.
It is vital to understand that insurance is not an investment program. Neither does it mean you should stop saving for emergencies. Several health insurance plans are available in the market and have distinct features. The best way to choose a policy is by understanding your requirements and comparing the various options.
What Are Deductibles?
Insurance providers require customers to pay a specific amount of money (the deductible) before they start shouldering medical expenses. In other words, deductibles are the buyer’s responsibility, and the insurance company will take over once you meet the deductible. For example, if your health insurance policy has a $500 deductible and you have to visit the doctor for a $100 check-up, you will have to pay the whole amount.
Here are six facts you must know about insurance deductibles.
1. Higher Deductibles Come with Lower Premiums
Insurance affordability is one of the primary concerns for most people. If you want to save on your monthly premium payments, you can opt for a policy with a higher deductible. This way, you will have to pay more out-of-pocket expenses in case of an emergency, but your monthly payments will be lower.
For instance, let’s say you choose a health insurance policy with a $500 deductible and a monthly premium of $50. In an emergency, you will have to pay the first $500, and the insurance company will cover the rest. If you choose a policy with a low deductible and a monthly premium of $100, the insurance company will have to pay the expenses after settling the deductible. Your monthly payments will be higher, but you will have to pay less during a hospital visit.
2. Deductibles Are not Mandatory Payments
Most people think they have to pay the deductible even if they do not use their insurance. That is not true. You only have to pay the deductible if you use your insurance policy. For example, if you do not visit the doctor or get any medical treatment during the year, you will not have to pay the deductible.
Also, not all medical insurance policies require you to pay an out-of-pocket amount to get coverage. Deductibles can be voluntary, and some insurance companies may not have them. Check your policy documents to see if you have to pay a deductible.
Additionally, some medical procedures may not require you to pay a deductible. For example, some check-ups and immunizations may be free, even if you have a deductible in your policy. Consult an insurance agent to learn more about these procedures.
3. You Can Opt for Comprehensive Deductibles
Not able to pay your out-of-pocket expenses immediately? No worries. You can spread the cost of your deductible over the year by opting for a comprehensive deductible. Once you have met your deductible, the insurance company will start paying for your medical expenses.
This way, you will not have to worry about paying a large sum of money upfront in an emergency. Also, you can get coverage and repay your accumulated deductibles when you can afford it. But ensure you have the required amount before the policy expires. Not all states have comprehensive deductibles, and opting for them will increase your monthly premium payments.
4. Paying Deductibles is Cheaper
You will incur high medical expenses when you have no insurance coverage. Also, you will have to pay the entire amount upfront, which can be difficult for many people. On the other hand, if you have insurance and meet your deductible, the insurance company will share the expenses. This way, you will not have to worry about paying a large sum when receiving medical care.
Also, insurers negotiate medical fees with their partners to offer their policyholders discounts. Whatever out-of-pocket you will pay will not equal the much you would pay when you only rely on cash.
5. In-Network and Out-of-Network Services
Every insurer has a network of doctors, hospitals, and other medical service providers. When you use the services of these in-network providers, you will not have to pay the entire amount. The insurance company will share the expenses with you, and you will only be required to pay your deductible and copayments.
On the other hand, when you use out-of-network providers, the insurance company may not share the expenses. You will have to pay the entire amount, which can be expensive. When they do, the deductibles and other out-of-pocket costs are generally higher. Therefore, always use in-network providers to avoid incurring high medical expenses.
6. Deductibles Can Change
Deductibles can change based on the type of insurance policy and your health condition. For example, if you have a family floater, the deductible will be higher than an individual policy. That is because the insurer will have to pay for the medical expenses of all members of your family.
Also, if you are diagnosed with a chronic illness, deductibles increase. That is because you will require more medical care, increasing the costs borne by the insurance company. Therefore, always check your policy documents to see if there have been any changes in the deductibles.
Summary
Medical insurance is a fundamental need for everyone. It helps you pay for your medical expenses and get treatment without worrying about the costs. Before subscribing to an insurance policy, always check if there is a deductible. A deductible is an out-of-pocket expense you must pay before the insurance company starts sharing the costs. Fully understand your obligations under the policy to avoid any surprises later. Keep these six things in mind about health insurance deductibles, and you will make informed decisions about your insurance coverage.
