A deductible simply means that you have to pay for some of the losses before your insurance company will pay anything. Unfortunately in health insurance deductibles are more complex than in auto or homeowners insurance. The deductible is the amount of money you'll have to pay out of pocket during a calendar year before the policy will start paying. If you have a $1,000 deductible your insurance company won't cover the first $1,000 of health expenditures you have in a calendar year.
Once you meet your deductible for the year, they will pay a large percentage of the losses over the deductible.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Think of the deductible as a form of self insurance. In other words, the portion you'll pay before insurance begins to pay on claims. Health plans usually offer a choice of deductibles have a lower premium cost if you choose a higher deductible. A higher deductilbe means you accept more cost upfront for the use of a health plan in order to receive a lower premium cost. After the deductible has been met, usually you go into a phase called "co-insurance". Co-insurance is the phase where you and the insurance company split the bill for care. A co-insurance level may be 50-50, 60-40, 70-30 or other combinations depending on your plan. For example if you had a plan with a 80/20 coinsurance provison and a $500 deductible and a bill for $2500 for a service. How it would be split up is as follows. The first $500 of the bill is yours. Of the remaining $2000, the insurance company pays $1600 towards the bill and you have an additional $400. Please note: once you've met your deductible for the year, you will no longer be charged it for claims, Co-insurance would be next. Then once you've met your co-insurance limits, your claims for the balance of the year (not counting copays) are covered at 100%.
As +Larry Gilmore and +Tony Canas have indicated, the deductible is an amount you must pay before accessing the major medical portion of your health insurance plan.
Some health insurance plans have copay's for items such as doctor and Rx while others are simple catastrophic plans where you are responsible for paying all illness and accident related claims before the plan pays anything.
If your plan has doc & Rx copay's you generally do not have to meet the deductible before the plan pays.
Regardless of whether your plan has copay's or not, keep in mind you are not paying the "full retail" price of care when you are in the deductible phase. If you are using par (network) providers, you are only paying the negotiated rate for your care.
Also some plans have zero coinsurance after the deductible, meaning the carrier pays 100% of your approved major medical related claims when using par providers.
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Once you meet your deductible for the year, they will pay a large percentage of the losses over the deductible.
Some health insurance plans have copay's for items such as doctor and Rx while others are simple catastrophic plans where you are responsible for paying all illness and accident related claims before the plan pays anything.
If your plan has doc & Rx copay's you generally do not have to meet the deductible before the plan pays.
Regardless of whether your plan has copay's or not, keep in mind you are not paying the "full retail" price of care when you are in the deductible phase. If you are using par (network) providers, you are only paying the negotiated rate for your care.
Also some plans have zero coinsurance after the deductible, meaning the carrier pays 100% of your approved major medical related claims when using par providers.