Typically an insurance policy will have a deductible, coinsurance or copayment, and an out of pocket maximum. Although every insurance plan is different and may not have each of these, it’s important to understand them and how they work. It’s especially useful when it comes time to choose future health care plans.
What Is A Deductible?
A deductible is an amount you owe for health care services before your health insurance plan begins to pay.
- For example, if Dwayne Johnson’s deductible is $2,000, he must pay the first $2000 himself.
- After he pays his deductible, he might have to pay a coinsurance or copayment. The insurance company pays the rest of the bill.
- In some instances, there is no coinsurance or copayment. Once the deductible is met, the insurance company pays the entire bill.
The deductible may not apply to all health care services that you need. You may not need to pay for services like physical therapy or chiropractic care. In these cases, the insurance company will pay some or all of the bill.
Family Deductibles
Family plans often have both an individual deductible and a family deductible. The individual deductible applies to each person. It’s a smaller amount that each person pays. The family deductible applies to all family members as a whole. This is a larger amount that each member collectively pays.
Some insurance commercials claim that their plans don’t have copays or deductibles. These plans may sound great, but the money being “saved” has to come from somewhere. Whether it’s by charging you high monthly payments or limiting the doctors you can see.
A good rule of thumb is if it seems too good to be true, it probably is. Look further into the plan to see just how “perfect” it really is.
Using your new knowledge about health insurance plans will allow you to better decide whether those plans are right for you and your family.
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