Health Insurance Deductibles

The deductible in a health Insurance policy is a defined dollar amount during the benefit period – usually a year – that the insured person pays before the insurance company starts to make payments for covered medical services.

Plans may have both per individual and family deductibles.

Some plans may have separate deductibles for specific services. For example, a plan may have a prescription drug plan that has a deductible for all Rx except for generic drug prescriptions, or a hospitalization deductible per admission.

Deductibles may differ if services are received from an approved provider as opposed to a provider not on the approved list.

The most common type of deductible for basic medical expense and major medical contracts is the calendar-year deductible, which is the amount that must be paid by the insured in a calendar year before the insurance company pays anything. This scenario is for what is termed a 100{e64afe744808f925ae4e621067af93b57aa961a0f89d5b9e5dafb1c9b1c107d5} plan. After the insured has paid the deductible for the year, then the insurance company pays everything for the rest of year. This is basically the same as the aggregate deductible in commercial insurance policies.

In a plan with a deductible amount and co-insurance the covered person must pay the deductible amount then the covered party and the insurance company are in the “co-insurance” part where they share the cost. A typical plan has co-insurance 80{e64afe744808f925ae4e621067af93b57aa961a0f89d5b9e5dafb1c9b1c107d5} -20{e64afe744808f925ae4e621067af93b57aa961a0f89d5b9e5dafb1c9b1c107d5} for a fixed dollar amount. I have created an Excel spread sheet to help people see the numbers that make up deductible and co-insurance for a health insurance plan.

For more information on health insurance deductibles, copays, co-insurance and maximums, check out this video on YouTube.

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