Saying medical treatment doesn't come cheap is an understatement. In some cases, folks have been forced down the road of bankruptcy because of the massive payments they were required to make.
If you are not prepared, medical matters can drain your wallet. Getting health insurance can help reduce the cost of medical bills or write them off entirely. However, you need to make sure that you know the ins-and-outs of this product.
If you have or are planning to get health coverage, you need to know about deductibles, especially comprehensive ones. We've looked into what you need to know before getting health insurance and that's up next.
What Is Health Insurance?
Health insurance is designed to cover certain medical expenses when and if you require them. There is a wide range of coverage types you can get that can pay for things like medications and hospital stays.
The more things that are included in your health insurance, the more expensive it will be. You will pay an amount each money for your health insurance, whether you use the insurance or not. This is called your premium.
This premium amount depends on a variety of factors and one of them is what kind of deductible option you choose.
What Are Deductibles?
A deductible is an amount you have to pay for medical costs before your health insurance kicks in. So let's say your deductible is $1,000, that means you will have to cover medical costs up to $1,000 before your insurance kicks in.
So if you get a $500 bill at the optometrist, and then $500 for a treatment, you will pay for all of that and then your insurance will kick in. You have the option of choosing different deductibles for different things.
For example, you can have one deductible amount for medicines and a different amount for certain treatments. When your insurer partially covers your bills after the deductibles, it is called coinsurance.
Your coinsurance responsibility may be 30% so if you get a medical bill of $100 after your deductible is paid, you will pay $30 and your insurance will pay $70.
Comprehensive Deductible: What Is It?
A comprehensive deductible means you choose one deductible amount for all your medical expenses. So let's say you choose a $1000 deductible. That is how much you will have to pay for all medical bills before the insurance kicks in.
A non-comprehensive deductible is when you pay different deductibles for different things. You can choose a $500 deductible on medication and a $1000 deductible on treatments.
The higher your deductible, the lower your premium will be.
Things to Look for in a Health Insurance Plan
When you choose an insurance plan, you want to make sure that you look for one with a comprehensive deductible. This way, everything in your coverage will have the same deductible applied to it, making it easier for you.
However, you should also take a look at your situation if this type of deductible is the best for you. If you think that a comprehensive one is not suitable for your needs you have options.
You can consider getting other types of deductibles such as non-comprehensive, individual or family, in-network and out-of-network, and prescription drug deductibles. You should discuss your options with an agent.
Less Coinsurance Responsibility
Coinsurance responsibility is the portion you are responsible for paying after reaching your deductibles. Let’s say your coinsurance responsibility is 30% and given the example above, there is a remaining $300 in your bill.
You will need to pay 30% of $300. Then, your coinsurance kicks in, and your insurer will pay the remaining 70% of the amount. You can look around for plans that offer lower coinsurance responsibility.
Whenever you come in for a medical visit, you are responsible for paying a service charge called copay, which must be paid regardless of deductibles.
Look for a coverage that requires a lower copay.
Low Out-of-Pocket Maximum
Your out-of-pocket maximum is the amount you need to pay throughout the year. It is the total of your deductibles, copay, and coinsurance responsibility.
Once you reach this maximum, your insurer will cover 100% of the remaining costs for the year.
A lower maximum will be easier to reach, which means that your insurer will be covering eligible costs sooner, compared to the situation if you have a higher maximum.
The Bottom Line
Getting the right health insurance requires time and effort. You need to read the fine print to figure out the best package for you.
You should get your health insurance agent to explain in detail about their deductibles, premiums, and limits on coverage. After all, you don't want to be caught by surprise when you actually need to use the insurance.