What is a Deductible? 💸
If you're new to health insurance, you might have heard the term "deductible" thrown around quite a bit. But what exactly is a deductible in health insurance? And how does it affect your coverage? In this blog post, we'll answer those questions and more.
What is a Deductible?
A deductible is a set amount of money you have to pay out of pocket before your health insurance kicks in and starts covering your medical expenses. For example, let's say you have a $1,000 deductible. If you have a medical bill for $1,500, you would have to pay the first $1,000 yourself, and then your insurance would cover the remaining $500.
Deductibles can vary depending on the type of health insurance plan you have. For instance, some plans have high deductibles but low monthly premiums, while others have low deductibles but high monthly premiums. It's important to understand your plan's deductible and how it fits into your budget.
How Does a Deductible Work?
Once you've paid your deductible, your insurance will start covering a portion of your medical expenses. For example, if your plan has a coinsurance rate of 80/20, your insurance will cover 80% of your medical bills, and you'll be responsible for the remaining 20%. Some plans have a copay instead of coinsurance, which is a fixed amount you pay for certain medical services, like a doctor's visit or a prescription. Copayments can be more predictable expenses than coinsurance because you know the set amount you will be responsible for per service vs. being responsible for a percentage of a bill that without knowing that total amount.
It's also important to note that not all medical expenses count toward your deductible. For example, preventive care, like an annual physical or a flu shot, is often covered in full by insurance and doesn't count toward your deductible. Be sure to read your plan documents carefully to understand what expenses are covered and what your financial responsibility is.
What is Knowing Your Deductible Important?
Knowing your deductible is important because you know what you’re responsible for before your coverage kicks in. If you’re enrolled in a high deductible plan and it would put you in tough financial situation in the event you had to meet that deductible you can work with a professional to help find coverage that works better for your specific budget and needs. Remember, you are the shopper and you have options when it comes to what type of insurance or plan is the right fit for you.
Conclusion
A deductible is a set amount of money you have to pay out of pocket before your health insurance starts covering your medical expenses. It's an important part of many health insurance plans and can help keep premiums lower for everyone. By understanding how deductibles work, you can make informed decisions about your healthcare and choose a plan that fits your needs and budget.
Questions about Medicare or your insurance? Contact Jocelyn Wolf, Licensed Sales Agent Specializing in Medicare & Co-Founder of Evolve Insurance Group, at 814.201.9708 or jocelyn@evolveinsurancegrp.com.
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Other Medicare Questions? We can be reached at 814.201.9708 or at jocelyn@evolveinsurancegrp.com.