Health Insurance Plans
Health insurance is one of the most expensive forms of insurance a person can purchase. However, there are ways to bring the price of this type of insurance down. One of the most common strategies involves using insurance deductibles.
The term deductible in this context refers to a specific amount of money that a person with insurance pays towards that health coverage before the insurance company will begin to pay out for the coverage. This can lower a person’s premiums, because the amount a person will pay in deductibles is part of the calculation that is made when determining how much a person will be charged in premiums. Usually, if a person pays higher deductibles, the premiums charged will be lower.
A common deductible for hospital care is $1,000. What this means is that the insured person will have to pay for the first $1,000 of medical bills after a visit to the hospital. After that $1,000 has been paid, the insurance company will begin paying off the remainder of those bills.
Another term that people may have heard of is insurance co-pays. A co-pay is not the same thing as a health insurance deductible. For example, a certain health insurance plan may have a $600 deductible and $60 co-pay. Under this policy, the insured is expected to pay the first $600 of medical bills.
After that deductible has been paid, the insured would then be required to pay an extra $60 for every claim that is filed through that health insurance plan. As long as the treatment provided is covered under the policy, the health insurance company would pay the rest.
Health insurance deductibles can also differ depending on the kind of treatment a person receives. For hospital visits, for example, the deductible that must be paid before the insurance policy will pay out for the care may be $1,000. However, for other kinds of medical care, the deductible required may be different. The same plan, for example, may only require a $200 deductible for prescription drugs.
A person can also use deductibles to lower insurance costs. With higher deductibles, there is a lower probability that the insurance company will pay out money under the policy. This lowers the risk for the company when insuring a person witch such a plan. When the insured helps burden healthcare expenses in this way, this allows the insurance company to charge lower deductibles. This gives people a way to lower their insurance expenses. All they have to do is ask for higher deductibles.
If a person has enough money saved for emergencies that would require the paying of deductibles, using them may be a good way to lower health insurance costs for many families.