8 Things You Should Know About Your Healthcare Deductible

Fran Majidi
March 26, 2019

Like auto and homeowners insurance healthcare insurance also has a deductible which needs to be paid before insurance begins to cover expenses. However, healthcare deductibles work a little differently. For instance, your healthcare insurance will pay for some services (annual checkup, immunizations, screenings and most types of preventative care) even before you meet your deductible. Like homeowners and auto insurance, the higher your healthcare insurance premiums, the lower your deductible and vice versa. However, healthcare insurance has something other types of insurance do not, a cap for out-of-pocket expenses for in-network physicians services. You may also have more than one deductible with a healthcare plan. Some plans have a separate prescription deductible and sometimes different deductibles for in-network and out-of-network providers. When the maximum is met, insurance is responsible to pay for your care.

After you read this article, SmartFinancial can set you up with a health insurance agent in your area, if you visit here. In the meantime, get more details about health insurance deductibles and costs below.

1. What Is a Healthcare Deductible?

With health insurance, the deductible is an amount that you keep paying towards each time you have a health care service. Once you reach the deductible limit, insurance begins to pay. However, your insurer will not necessarily pay 100% of your services after your deductible amount has been met. In most cases, you’ll still have to pay copayments or coinsurance for covered services. Some plans have separate deductibles for prescription drugs and certain services. Note that when you buy medication, the amount you pay out-of-pocket doesn’t count towards your main deductible (only towards your prescription deductible, if you have one).

2. What’s a Family Deductible?

Family plans usually have both an individual deductible and a family deductible which applies to everyone on the plan. In 2018 the maximum deductible was $7,350 for individuals and $14,700 for families. The maximum out-of-pocket deductible for 2019 will be $7,900 for individuals and $15,800 for families. These out-of-pocket costs do not include monthly premiums, which keep your coverage in place. Usually, copays also do not count towards your maximum out-of-pocket expenses and you must continue to pay them even after you’ve met deductible limit. Even when you choose a high deductible catastrophic plan, your out-of-pocket expenses cannot exceed these legal limit.

3. What Is the Difference Between In-network and Out-of-network Deductibles?

You have separate deductibles for both of these. You have one deductible when you use providers in your healthcare plan’s list of in-network providers and a different deductible for services you receive from out-of-network providers.

4. Do You Qualify for a Premium Tax Credit?

You’ll find out if you qualify for this after you apply for healthcare using the Health Insurance Marketplace. If you do qualify, your monthly health insurance bill will be significantly reduced. You may even find out that you’re eligible for a cost-sharing reduction. It’s important to keep these two types of savings in mind when you choose a plan. If you opt for a silver plan, for instance, you’ll pay very little while receiving gold or platinum-level plan benefits (the cost and quality of coverage increase in this order: bronze, silver, gold and platinum). This is because cost-sharing reductions lower your deductible. For example: let’s say the deductible with a silver plan is $750. With cost-sharing discounts, your deductible may be as low as $300! You’ll also have lower copayments and lower out-of-pocket maximum.

5. What’s the Difference Between Coinsurance and Copay?

Coinsurance and copays do not usually count towards your deductible. With coinsurance, you have a set percentage amount that your health insurance carrier is responsible to pay and a percentage you’re responsible to pay. For example: You went to the doctor for a service that cost $1200 and you have a 70/30 breakdown. Your health insurance covers 70% of this cost ($840) and you pay the remaining 30% ($360).

Copays are different. This is the fixed amount you pay, usually when you see your doctor or pay for some type of covered health care service. Usually, between $15 and $35.

6. What Is a High Deductible Health Insurance Plan and Who Should Buy It?

There are IRS guidelines for what is legally considered a high-deductible health plan (HDHP). If you plan to buy a health savings account, you’ll also have to buy a high-deductible health insurance plan that is HSA qualified. By definition, the annual deductible of a high deductible health insurance plan is no less than $1,350 for an individual and $2,700 for a family. Out-of-pocket expenses cannot exceed: $6,650 for an individual and $13,300 for a family.

As a complement to an HDHP, a health savings account (HSA) is a great way to save for medical expenses while also reducing taxes on your income. The way it works is that you transfer a pre-tax deduction into a savings account that must only be used for medical care. You can either do this through your work or through most financial institutions. However, there’s no way of taking advantage of an HSA without first buying a HDHP. You also cannot be enrolled in Medicare or be a dependent.

7. How Do I Compare Deductibles and Premiums When Choosing a Healthcare Plan?

Generally speaking, if you pay higher premiums your deductible will be lower. However, it’s important to consider out-of-pocket expenses for when you may need unexpected medical care. Don’t focus only on the price of your premium. You must consider that your bills will be your responsibility until your deductible is paid, which may be months away. You can estimate this cost by calculating your annual medical expenses in advance. While there will be deviations when the year unfolds, doing an estimate will give you an idea of what kind of healthplan to buy. Or, it will help your agent help you decide which is best for you. If you don’t have an agent you feel you can trust, let us pair you up with one of our trusted partner agents here.

8. What Are Supplemental Health Plans and Should I Buy One?

Buying additional insurance feels like salt to a wound when you’re struggling to pay doctor bills while dishing out hundreds of dollars a month in premium payments but supplemental health insurance may be the answer to your medical nightmares. ?A supplemental health plan will help you cover out-of-pocket expenses in two ways: In a medical gap plan, you’d be paid a lump sum to cover an illness or accident. You can use that money to pay your deductible on your main medical health plan or relevant expenses like childcare, Uber, etcetera. Telemedicine or telehealth is another way supplemental health coverage can help. Both use telecommunications to simulate a healthcare visit to help patients. Telehealth is a little different in that it refers to a broader range of remote services (like alerting the public of a disease outbreak) than telemedicine (clinicians helping patients) and is slightly more expensive ($40-$50 a visit versus $15 o $20 a visit) These forms of supplemental insurance allow you to get doctor consultations for minor illnesses, like allergies, a cold, even bronchitis.

Telemedicine is growing quickly in the U.S. It’s a great option for parents who usually use the services of urgent care. This is likely going to be a cheaper and more convenient option. Ask your health insurance agent about this if you have a high deductible bronze or silver plan. It may help lower your cost of care.

If you still have questions or feel like you’re ready now to make some important healthcare decisions, call us to be paired with the right agent: (877) 323-7750

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