It might be surprise you to know that you could save a significant amount of money by simply understanding the finer details of how health insurance deductibles work.
You’ve no doubt heard about deductibles before, in the context of vehicle or home insurance, but, trust us, healthcare deductibles are a different beast. Sure, there exist a lot of similarities between these, but when it comes to healthcare, it’s much more complicated. Understanding the various kinds of deductibles as it pertains to health insurance, however, won’t just go a long way in saving you money, it will also allow you to make the most out of your coverage.
What is a Health Insurance Deductible?
In a nutshell, the health insurance deductible is what you pay out of your pocket to your insurance provider before it starts covering your medical expenses. It is essentially the money you give to self-insure, before you can claim any medical coverage.
What are the Different Kinds of Health Insurance Deductible?
Well, there are three kinds we’ve listed here, followed by a brief description what they mean:
Comprehensive Deductible
Among all other deductibles, the comprehensive deductible is, to a huge degree, the easiest to understand. Essentially, it is a deductible amount that applies to all types of medical coverage, and it will continually be applied until you’ve hit your limit. One benefit is that it removes the guesswork—you won’t need to know what deductible applies to what medical coverage, since a comprehensive deductible applies to all coverages.
Non-Comprehensive Deductible
In contrast to a comprehensive deductible, a non-comprehensive deductible only applies to specific kinds of medical coverage or expenses. This kind of deductible doesn’t cover all kinds of medical coverage; some kinds of medical coverage may be covered, others may not be covered, while others might even require the deductible paid before any benefits can be had.
Cumulative Deductible
A cumulative deductible is simply like a group plan. If one had a family under one plan, for instance, they will have a cumulative deductible. In contrast to an individual insurance plan where each person under the plan must pay the deductible before getting medical coverage, a family insurance plan allows its members to combine their payments to meet the deductible amount.
Questions About your Insurance that Need to be Answered
Here are some questions you need to know in order to have a better grasp of the benefits, or the lack of benefits, of your health plan:
What coverages don’t have deductibles, and what, if any, is the limit?
What coverages have deductibles?
Which coverages require either co-pay or co-insurance?
When No Deductible is Asked
Sometimes a plan will provide coverage for certain procedures or treatments without requiring a deductible. But you must always read your plan’s fine print and check what, if any, are the limits. Because if you exceed your limit, you’ll need to pay the balance out of your pocket.
Is a Higher Deductible More Preferable?
You might be having difficulty paying for your health insurance, but don’t choose a plan with a higher deductible immediately until you’ve investigated the costs in the long run. Remember, in the event of an emergency, you might be unable to afford a high deductible. One must always remember that when it comes to choosing a health insurance plan, one must think long term; it’s the cost when one needs to get coverage that is more important than the short-term cost of acquiring a plan.
Saving for Higher Deductibles
If you can’t pay for a higher deductible today, then you could save money for it while you’re under your old plan. A few years down the road, when you’ve been able to save a sufficient amount, you can change your plan come renewal time to one that had a higher deductible. Doing this can end up make you pay less for your health insurance in the long term.
A Health Savings Account
A health savings account is a bit like a personal savings account, except that it can only be drawn from for specified medical expenses. Eligibility in a health savings account typically requires that one is enrolled in a high deductible health insurance plan. So, there are advantages and disadvantages here that may or may not apply to your specific circumstances. But, definitely, a health savings account can be one way for you to make the most out of your money when it comes to your health insurance.