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California Health Plan Deductibles
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DEDUCTIBLE:
This is the
amount you pay for medical services each
calendar year before your insurance
starts to pay.
It's important to
remember that with a PPO plan, you will
get discounted PPO rates which can lower
the costs by 40%-60% even though you
have your deductible still to meet. Make
every effort to always stay in-network
to keep your costs down.
In an insurance
policy, the deductible is the amount of
expenses that must be paid out of pocket
before an insurer will pay any expenses.
In general usage, the term deductible
may be used to describe one of several
types of clauses (see below) that are
used by insurance companies as a
threshold for policy payments.
If you have a $500
deductible and you incur a medical bill
for $450, you will be required to pay
the entire amount yourself if your
deductible has not yet been satisfied.
Once you have paid $500 worth of
expenses yourself, the health plan will
start covering your medical expenses.
Depending on the terms of your plan,
deductibles may not apply for every
service. For example, you may not have
to pay a deductible for medical office
visits, but may be required to pay them
for hospital visits.
Deductibles are
typically used to deter large number of
trivial claims that a consumer can be
reasonably expected to bear the cost of.
By restricting its coverage to events
that are significant enough to incur
large costs, the insurance firm expects
to pay out slightly smaller amounts much
less frequently, incurring much higher
savings. As a result, insurance premiums
are typically cheaper when they involve
higher deductibles.
Deductibles are
normally provided as clauses in an
insurance policy that dictate how much
of an insurance-covered expense is borne
by the policyholder. They are normally
quoted as a fixed quantity and is a part
of most policies covering losses to the
policy holder. The insurer then becomes
liable for claimable expenses that
exceed this amount (subject to the
maximum sum claimable indicated in the
contract). Depending on the policy, the
deductible may apply per covered
incident, or per year. For policies
where incidences are not easy to delimit
(for example health insurance), the
deductible is typically applied per
year.
First, the official definition:
DEDUCTIBLE:
The amount you must pay for medical services each year before your insurance begins paying. The deductible is an amount you will pay first before you get help from the carrier. Keep in mind that with a PPO plan, you will get discounted PPO rates which can lower the costs by 30%-60% even though you have a deductible to meet. It's very important to always stay in-network to keep your costs
down.
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Exceptions to Deductibles:
Most traditional plans on the market allow copays for office visits and prescription before you meet your deductible. For example, if there is a $40 copay for office visit, you will pay the $40 right away rather than having to pay the full doctor visit subject to the deductible.
Prescription coverage is frequently broken out separately from the main deductible. There may be a separate deductible from Brand name drugs. This means that with a $250 brand deductible and $30 brand copays, you would pay the first (resets each Jan 1st) $250 of your drug costs and then you would get $30 copays afterward. The brand RX deductibles on the California individual family market typically run from $250-$750 depending on the plan. On the California Small group market, the deductibles run from $0 to $250 on average.
Some plans, such as the popular HSA (Health Savings Account) plans do not break out office visit and prescription from the main
deductible. The deductible are all inclusive. There are a few other plans on the market which include the office and/or rx as part of the deductible so make sure to look at the plan detail when running your California health quote. The trade off with the HSA plans is that they can be much less expensive. If you are saving $500-$1000 annually or more, that pays for a lot of office visits and medication cost.
Deductibles are handled in two ways when multiple family members are on one
policy. Except for HSA plans, deductible are usually per person when you have more than one family member on a policy. You will typically see a "2 member max" statement around the deductible. This means that if two people in a family hit their deductible, the other family members do not need to. This is to protect against a catastrophic health situation where every family member had large bills in one year and the resulting out of pocket could be 10's of thousands.
HSA's or Health Savings Account plans on the other hand are cumulative
deductibles. You essentially double the single person deductible and the entire family (2 or more people) is working towards one family deductible. Depending on the situation, this works to your favor or not. If one person in a family has large bills, he or she has a larger deductible to meet than if he/she were on an individual deductible plan. However, if multiple members have bills, it can be work to their advantage. Ultimately, the premium savings on an annual basis should more than compensate for the large deductible and that has been the attraction of HSA plans. The HSA usually has a high deductible health plan as its core.
Out of network providers. Keep in mind that the discounted PPO rate for a given charge is what will be applied to a deductible if you use out of network providers. For example, let's say you have a $500 deductible. If you have a $200 charge for an out of network provider, and the PPO contracted rate for that procedure is $100, the carrier will typically only apply the $100 to your deductible. Try to stay in-network with PPO plans.
After your deductible is met in a calendar
year, with most plans, you then start to share the costs with the carrier for future medical charges in the form of co-insurance or copays according to the benefits of the policy.
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For more
information please contact us at Toll-Free
800-858-0563 or email us at contact@pacifichealthbrokers.com |
Concentrating on health insurance for over 19 years, Pacific Health Brokers has developed
a reputation for explaining health insurance plans in a simple, direct, and honest way.
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