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What You Need To Know About The Health Insurance Deductible
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If you haven’t been paying attention, your health insurance deductible can be a nasty surprise and a shock to your bank balance. People pay a lot of money for health insurance, and then still get a big bill after visiting a doctor. What’s going on?

Well, written into your insurance policy are deductibles, or the amount of money you have to pay before the insurance company pays anything. So while you might think that the deal is that you pay $25 for a doctor visit or $15 for a prescription, you’re not entirely correct. You first have to meet your deductible.

So if you have a health insurance deductible of $500, then the insurance will not pay you one thin dime until you’ve paid out $500. Sometimes it gets a little complicated, as in the case of a family. Some plans have separate deductibles for every person in the family. Others have just one deductible for everyone together.

The time to think about your health insurance deductible is when you are buying the policy. If you have a low deductible, your premiums will be much higher. It’s tempting to go with the higher deductible and lower premiums, but be careful. Look back at how many doctors visits and other medical visits you had in the previous year. If you only went once to a doctor last year, if may be cheaper for you to get the higher deductible policy and just pay for the few services that you do use. Just make sure you have the cash handy when you need it.

A good question to ask is what the purpose of the health insurance deductible is. It’s really not just to increase the insurance companies’ profits, although it doesn’t hurt their bottom lines.

The major intent is to impact consumer buying behavior. Think of it this way. Most things you buy you pay for with your own money, whether you pay with cash, a credit card, or take out a loan. It’s really just between you and the person making the sale. If you are getting a loan, the bank or whoever is lending the money doesn’t really get involved in the decision of what you are buying. They may refuse to lend the money or put on a few conditions, but that’s about it. In the end, however, you are responsible to pay.

But when buying health care, there is a third party involved: the insurance company. They may actually pay more for your health care than you have paid in premiums and deductibles. So they have an incentive for you to use fewer health care services so they will have less to pay for. By making people pay a health insurance deductible, they are creating an incentive for people to at least think twice before running off the doctor.


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