What is a Deductible in Health Insurance?

 
Health insurance is something that most Americans have and use on a regular basis. Unlike most things that are used regularly, health insurance is one thing that can be very difficult to understand. Statements come in the mail and can seem like a foreign language. Payments may even be required, but does everyone even know what they are being billed for? One question that a lot of people may ask is, “what is a deductible in health insurance?” It is an understandable question considering how expensive health insurance is. The rates increase almost every year so people want to know exactly what they are paying for.
 

First of all, deductibles are not to be confused with co-payments. They are two totally separate charges that affect each person and policy differently. A deductible is a set amount of money that the insurance policy holder is required to pay out of pocket each year before the insurance provider will begin covering the cost of health care. Co-payments and premiums still need to be paid once the deductible is met but the actual medical bills are no longer out of pocket.
 
Deductibles may vary depending on the insurance plan that is held. For example, family plans will typically have higher deductibles than single plans due to the fact that the plan is covering more people. When the policy is initially purchased, different deductibles can be chosen from. Higher deductibles will make for a lower monthly premium cost, whereas, a lower yearly deductible will result in the monthly charges being higher. One should make a decision on which route to take with the deductible amount based on how much they think they will use the healthcare insurance. Since deductibles are a set annual amount that has to paid out of pocket before the provider will cover the health care for that year, the less health care you receive the less you will pay out of pocket and vice versa.
 
Understanding deductibles is key to picking the right insurance policy. Every circumstance will vary, therefore, every individual will have a decision to make. Regardless of the situation, no one should have to ask themselves, “what is a deductible in health insurance?” This information is readily available to anyone who receives or wishes to receive health care.
 
Disclaimer: This is for information purposes only and NOT a recommendation from Mills Insurance. Please contact a licensed insurance specialist to discuss insurance coverage’s and laws.