Health Care Tips: Understanding Your Health Insurance Deductible And Out-Of-Pocket Costs

You can save a lot of money on health care costs if you better understand how your health care services or health care insurance deductible work.

Health care deductibles can be more complicated than home insurance or car insurance deductibles. This is one of the reasons why people are less familiar with it even though health care deductibles work similarly. You can make the most out of your health insurance if you become more familiar with the different kinds of deductibles.

What Is a Health Insurance Deductible?

The health insurance deductible is the amount you pay out of pocket before an insurance provider begins to pay for any expenses. Other terms that you may have heard used to refer to health insurance deductible include medical deductible and health plan deductible.

3 Different Types of Health Insurance Deductibles

Health insurance policies have three different kinds of deductibles. A brief explanation for each one is provided so that you can better understand how these deductibles will affect you on different coverages:

  1. Comprehensive deductible
  2. Non-comprehensive deductible
  3. Cumulative deductible

Comprehensive Deductible

A comprehensive deductible is a deductible amount that applies to and includes all the coverages in your insurance plan. It adds up, and once you’ve met your comprehensive deductible, your health insurance plan will pay for medical expenses. This is the easiest type of deductible to understand, and you will not have to guess how different deductibles apply to different coverages in your plan.

Non-Comprehensive Deductible

A non-comprehensive deductible means that not all of the coverages in your health insurance policy will have a deductible applied to them. A deductible only applies to specified coverages.

This is a very common condition in many policies. This type of deductible can have many advantages for you because your plan could provide for some medical expenses without you having to eat into your deductibles.

Family Deductibles 

If you have a family health insurance plan, you might be interested in what is called cumulative deductibles.

In insurance plans, family members might have individual deductibles, or the plan could have just one family deductible. A family deductible does not require each member to meet the deductible individually. With a family deductible, all members of the family can pay cumulatively towards a deductible. Once this cumulative amount paid by everyone meets the deductible, any member of the family who is part of the plan can enjoy the insurance benefits.

Cumulative deductibles in family health insurance plans can help save money because of the contribution of every plan member to meet the deductible counts.

Are Health Insurance Deductibles the Same for All Coverages?

Understanding how the different kinds of deductibles work are very important because now you know that they are not the same for all the coverages in your health insurance plan.

Every health insurance plan is different. Some coverages have lower deductibles compared to your overall insurance plan. Some plans even cover medical expenses and procedures with no deductible.

Remember to ask your insurance provider questions that will help you better understand your health plan coverage and deductibles. These questions will help you have a better idea of the amount of money you need for out-of-pocket costs.

Questions About Deductibles and Other Out-of-Pocket Costs

  • What coverages are subject to a deductible?
  • Are there any coverages that do not have a deductible? Do these coverages have limits?

Out-of-Pocket Costs Even When There’s No Deductible

There are insurance plans that offer coverage for medical costs “without a deductible.” Read your health insurance plan carefully and check for the limits. Limits are not the same as deductibles, but you will also have to pay out of your pocket when you hit the limit in your health insurance plan.

Here is an example of this scenario: your plan may include the “no deductible” to eye exams. But your plan may have a limit to the exam cost or even the cost of the glasses that you will need to buy.

If the limit for the eye exam coverage in your health insurance plan is $50, and your eye exam costs $65, you will have to pay the difference of $15. In this example, you still had out-of-pocket expenses even though there was no deductible.

Who Chooses the Health Insurance Deductible?

Some people have the impression that they only have one option. However, a better understanding of health insurance deductibles helps you realize that you can always ask for quotes with different deductibles. When you purchase your health insurance plan, you can choose the deductibles that apply to the coverages.

Over time, the money that you save on the costs could easily add up to the amount that you need to meet the deductible. Learn to put aside those savings. This way, you are in control of your money. If a medical emergency never comes up, you will come out on top with a good amount of savings. All this really depends on the type of medical services that you need and anticipate.

Choosing a Higher Deductible on Health Insurance

A high-deductible health plan means that you’ll need to pay more out of your pocket before your insurance pays for your medical expenses. But taking a higher deductible saves money in the long term because you get lower monthly premiums. You need to remember, though, that it is not about the cost today, but it’s about what it will cost you when you need to use the insurance. You might be putting yourself at risk if you cannot afford to pay the higher deductible in your medical plan in an emergency.

Here’s a helpful tip that you can use when deciding to get a high-deductible health plan: If there was an emergency and you had to come up with the deductible tomorrow, would you be able to? If your answer is no, look for another plan that will work better with your budget.

Saving Money for Higher Deductibles on Health Insurance 

If you cannot afford a higher deductible today, you can choose to save some money specifically for health insurance. Put aside money every month into an emergency fund.

Keep saving money into this emergency fund, and in a year or two, you just might have saved enough to take a higher deductible. With this option, you’ll pay less money in the long term for your health insurance.

Consider a Health Savings Account

A health savings account is another option that you can learn more about that will help you with your medical costs. There are many benefits to having a health savings account, which is why more and more people use them to save and pay for medical expenses.

Saving money is difficult enough, but it gets even worse when an emergency strikes and puts your health at risk. A health savings account works like an emergency fund just for medical costs. So if an emergency does not happen, you will have savings for the future.

Based On Materials from The Balance

Photo Sources: Center Malta, The Balance, Pixabay, Kiplinger