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How Health Insurance Deductibles Work | OH Employee Benefits

By Rachel Nall

Selecting a Policy

Health insurance is vital to ensuring you can cover your medical expenses in case of illness or emergency. However, there are a few buzzwords associated with insurance that could confuse even the most insurance-savvy person. One of which is a deductible. In its most basic form a deductible is a monetary limit that you must reach before you are able to enjoy the full benefits of a life insurance policy. Some exceptions to meeting your deductible are potentially an emergency department visit or routine physician checkup.

Your deductible is typically determined by the amount of money you pay monthly for your insurance policy. A policy with a higher deductible will typically have a lower monthly insurance premium because a person will have to pay more in order for her full insurance benefits (which will then be paid entirely by her insurance company) kick in. Conversely, a policy with a low deductible will often have high insurance premiums. A person will typically select the insurance policy for her based on her ability to pay up front (which would indicate a higher deductible policy) or if a person typically has a significant amount of medical bills a year (which would indicate a lower deductible policy).

Meeting Your Deductible

If you have a family insurance policy, your deductible may be reflective of the costs your entire family must spend in order to meet your deductible (this deductible is usually twice the amount of a single person’s deductible). Any moneys paid before you meet your deductible are considered “out-of-pocket” expenses. These types of expenses may include

The idea behind a deductible is that you share somewhat with the insurance company the costs of your medical expenses. Then, once you have met your deductible, you can be afforded some peace of mind that if you have catastrophic medical expenses, you will receive full payment for them through your health insurance. These expenses could include physician visits, medications, physical therapy, medical devices (such as foot orthotics) or any other factors related to medical expenses.

Health Deductibles Met

Even when you pay for medical expenses, such as physician’s office visits, either you or the doctor’s office will notify the insurance agency in order to report these expenses. Once you meet your deductible, your insurance company will notify you and reimburse you for any medical expenses in excess of your deductible that you incurred. For example, if your deductible is $1,000, and you have $920 in charges before you go see your physician. After this doctor’s visit, you will have paid $1,050 in medical expenses for the year. In this instance, you will be reimbursed $50 for meeting and exceeding your deductible.

Once your deductible is met, your medical expenses are covered. For this reason, many choose to schedule several doctor’s appointments following a met deductible to avoid future expenses when the deductible begins again for the next year.

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