Demystifying the Deductible

The world of health insurance can be daunting. With changing plans and requirements by the government, it’s easy to get confused. Though we can’t address all the aspects of health insurance in this blog, we can offer some information on a commonly asked question. What is a deductible and how does it affect what I pay?

First let’s talk about what money you each year for health care when you have insurance. There are four places your money goes.

• Monthly premium x 12 months: The amount you pay to your insurance company each month to have health insurance.
• Copayments and coinsurance: Payments you make to your health care provider each time you get care, like $20 for a doctor visit or 30% of hospital charges.
• Out-of-pocket maximum: The most you have to spend for covered services in a year. After you reach this amount, the insurance company pays 100% for covered services.
• Deductible: How much you have to spend for covered health services before your insurance company pays anything (except free preventive services)

For example, if you have a $2,000 deductible you pay the first $2,000 of covered services yourself. After your deductible is met, you share the cost of medical expenses with your insurance through the end of your plan. Most health plans begin January 1 and run through December 31.

After the Deductible

So what does it look like after you pay your deductible? Depending on your health plan you will either have a copayment or coinsurance for services. As stated earlier, these are amounts determined by your plan. The copay is a set dollar amount, and the coinsurance is a percentage of the service cost. It should be noted that if you have a copay for services before your deductible is met, this money does not count against the deductible.

While the amount of money you pay for services decreases when your deductible is met, it may seem like you just keep shelling out money. The good news is each plan has an out-of-pocket amount. You will remember that this is the maximum amount of money you will have to pay during the plan year for covered services.

Many plans pay for certain services, like a checkup or disease management programs, before you’ve met your deductible. Preventative services are typically covered by most plans so be sure to check. Some plans have separate deductibles for certain services, like prescription drugs. Family plans can often have both an individual deductible, which applies to each person, and a family deductible, which applies to all family members.

What This Means for You

The key thing to remember is that you need to speak to your insurance agent. They can provide you with a list of covered services, copay/coinsurance amounts, your deductible, and your out-of-pocket amount. They can also list for you what counts towards your deductible and what doesn’t.

If you know that you have a major medical procedure that you need or a medical purchase to make like a lift chair or a hospital bed, you can work with your insurance company to plan accordingly. Many people are able to meet their deductible the first half of the year and then plan surgeries and purchases at a significantly reduced, or no cost!

At All-Star Medical, we strive to make your experience as easy and stress-free as possible. While we don’t work directly with insurance companies, we understand the frustration and confusion that can come with trying to navigate that field. We suggest spending some time with your insurance agent and learning the specifics of your individual plan and then come see us. We always welcome your questions. The staff at both of our locations are kind and have knowledge of all our products and financing. Let us help you make the most of your money!