What is a comprehensive deductible, and what choices do you have when it's that time to choose the right health insurance plan for you or your family?
What is a Deductible?
The term "deductible" refers to the annual amount you must pay out of pocket before your health insurance plan will start paying the benefits (Health Insurance Control, 2008). There are usually two types: comprehensive and non-comprehensive.
Comprehensive Deductible
In a comprehensive deductible plan, you need to pay your medical bills in their entirety to meet a certain amount, the deductible. The size of a comprehensive deductible varies from $100 to thousands of dollars. Once the deductible is met, the insurance company will start paying for your health expenses, according to the plan you chose. Most companies provide 80/20 co-insurance plans. It means that you would be responsible for 20 percent of a medical bill, and 80 percent would be paid by your insurance company after the annual deductible had been met.
An example: Your comprehensive deductible is $500. Your co-insurance plan is 80/20. Your medical bill is $4,000.
The deductible must be met first, meaning you have to pay $500. The remaining $3,500 will be paid according to the insurance plan, 80 percent by your insurance provider, which is $2,800, and 20 percent by you, which is $700. Therefore, you have a total out-of-pocket expense of $1,200.
Non-Comprehensive Deductible
A non-comprehensive deductible plan works almost like a comprehensive deductible, except that not all services you pay for count for the annual deductible--such as office and emergency room visits or prescription medicine. You can still visit a doctor but will be responsible for a co-pay amount.
Deductibles vs. Monthly Insurance Premiums
The deductible must be met yearly. You can reduce the amount of your deductible by increasing the monthly insurance premiums, and vice versa. Don't forget that by selecting low monthly premiums when choosing a health coverage plan, you will increase your annual deductible--which means more money paid out of pocket (Bailey, 2008). Family comprehensive deductibles are usually higher than individual ones, but it also means that all family members' medical bills count toward a deductible.
Reference List
Health Insurance Control. (2008). Deductible-Health Insurance Definition. Retrieved Feb. 10, 2009, from http://www.healthinsurancecontrol.com/deductible-definition.php
Bailey, Eileen. (2008). Health Insurance Deductibles: Lowering Premiums Could Mean Increasing Out of Pocket Expenses. Retrieved Feb. 10, 2009, from http://health-insurance.suite101.com
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