How Do Health Deductibles Work?

This year brought many changes. A new job brought you to a new city and a new apartment. On top of that, you are now getting a completely different health insurance plan from what you were used to. Although the medical coverage is great, you are not quite sure how health deductibles work.

What are Health Deductibles?

Health deductibles are a capped monetary amount that a health insurance provider may require you to pay before they start paying for your medical coverage. For example, you may be in a PPO (preferred provider organization) with a health deductible of $1,500 for the year. That means you would have to pay $1,500 out of pocket for medical expenses before the value of your health insurance kicks in. Generally, the higher the deductible minimum, the less the monthly premium charges for the health insurance will cost.

Health Deductibles Vs Co-payments

Health deductibles are not the same thing as co-payments, and often, co-payments do not apply towards meeting ones deductible. Depending on your health insurance plan, even if you fully meet your deductible amount for the year, you will still be responsible for paying co-payments for doctor appointments and prescription drugs.

A health deductible forces the insured person pay towards the bottom line of their own health care. Health deductibles help insurance companies offset the cost of providing medical care to their customers. Those opting into an insurance policy with a deductible will know the amount they need to meet as part of the terms of their contract with the health provider.

Raise Your Health Deductible to Save Money

A higher deductible can help make health insurance affordable if you are not provided coverage as part of an employment benefit. Consider asking about raising your health deductible if you want to lower the amount of money you pay for health insurance coverage.