Just began dealing with health insurance and trying to understand how deductibles work. I recently got a health insurance plan through my job, and it mentions something about a $1,500 deductible. Can someone explain in simple terms what this means? How does it affect what I pay for medical services?
Thanks in advance…
The amount YOU are required to pay as a deductible prior to your insurance taking effect. It’s in place to prevent consumers from driving their insurance company completely broke.
Like with any insurance, it relies on your unique risk profile, your situation, and the amount of coverage you require.
In the event that your deductible is not satisfied, you pay until it is, at which point your insurance begins to apply.
Assume you have $500 left over from your annual healthcare budget and a $2000 deductible. If you break your arm, you will pay the first $1500 of the total bill; your insurance will cover the remaining amount (at whichever percentage they pay).
You pay it out of pocket rather than using a deductible.
A deductible in health insurance is the amount you must pay out of pocket for covered medical services before your insurance plan starts to pay. For example, if your plan has a $1,000 deductible, you pay the first $1,000 of covered services, and then your insurance begins to cover costs according to your plan’s terms
Think of a deductible as a yearly challenge that you need to overcome in order to have your medical expenses covered. Imagine it as a sort of initial investment. With a $1,500 deductible, you would be responsible for paying the initial $1,500 of any covered medical expenses out of pocket.