How does deductible work for health insurance ?

By | January 4, 2022

This article helps to give a better understanding of how deductibles work in terms of how the health insurance system operates.

In today’s world, numerous medical terms are used interchangeably, causing many people confusion over the meaning of one term and another.

When it comes to health insurance, a deductible is a popular word that generates a series of meanings.

In this article, we will be discussing the term in detail.

So, what can we describe as a deductible?

Simply put, a deductible is a sum of money you need to pay before your insurance scheme started.

It’s is typically a constituent of cost-sharing. It is usually charged on an annual basis. Meanwhile, it can vary from one health insurance provider to another.

And what’s the deductible you can pay on your health insurance?

A 2019 survey shows that average deductibles are calculated on the plan you’re subscribing for.

There are deductibles for individuals, employees, and lots more.

Usually, the employer-provided program ranges from $1000 to $1500.

What are the types of deductible plans available to users?

Majorly, there are two kinds of deductibles.

They are :

  1. High-deductible
  2. low-deductible plan

High Deductible

This kind of insurance plan is suitable for those who desire to cover a few medical expenses.

This plan affords you to pay less money. It is characterized by low premiums.

Low-deductible plan

This nature of insurance plans has gained popularity over the years. It let you pay a small amount each month in premium payments.

When you are on this plan, you’re likely going to have a higher premium.

Meanwhile, your deductible will be lower than the high deductible plan.

So far we’ve discussed some details about deductibles.

Let’s discuss something about how all kinds of deductible works.

How does deductible work for health insurance

How does deductible work for health insurance

There is a certain amount of money you need to pay your insurance company to access any available deductible plan.

For example, if your program requires you to pay $1000 , you will have to pay $1000 to the insurance company before activating your plan.

Therefore, it can cost you some months to attain the deductible threshold.

And sometimes, a visit is enough to reach this target.

Meanwhile, that fee is to activate your plan. In most cases, you will be paying your deductible to pay to the hospital or clinic.

For instance, if you pay a $300 charge at the emergency room, you will have to pay the fund directly to the hospital.

So, after that is done, your insurance company will begin to pay the bills your insurance plans cover.

Meanwhile, you need to know that this deductible often resets to $0 when you start a new policy period.

 What’s the right deductible for you?

Choosing the right deductible for yourself is based on some factors, namely :

  1. largely on how many individuals you intend to insure.
  2. your level of activeness,
  3. the number of doctor appointment you intend to have in a year.

If you want to manage your expenses easily, you can consider low deductibles. But if you need to cover a few expenses, consider a high deductible.