Many people often ask what does deductible mean in health insurance. We know that health insurance is incredibly important these days. Having health insurance is like having a full protection to your health and well being. Today, we live in an unhealthy world with numerous sicknesses and diseases around us. People can get sick really easily and get rushed to the hospital. For those who are quite rich and fortunate, the expensive medical bills wouldn’t be a problem at all. However, for those who are less fortunate, paying those expensive medical bills can be a major problem.
This is where we need health insurance. Health insurance becomes critical because it will help us paying all those medical bills and all the expenses that we have to make when we sick. Of course it is not all of the expenses but at least we do not have to endure all the expenses on our own. Of course we have to pay some amount of money in monthly basis but it is totally worth it. That is why beside insurance for your life and your car, insurance for your health is also incredibly essential.
Today, there are many insurance companies offering health insurance package that you can choose. However, to choose the best, at least you have to know how the insurance works. You will find the term “deductible” a lot in the insurance and for common people, probably they do not even have any idea what the term means in the insurance world. To avoid complication, below you will see the explanation of what does deductible mean in health insurance so that you will not get confused about it anymore.
The Definition of Deductible in Insurance
The term “deductable” can be defined as a certain amount of money that you have to pay for the covered health care expenses or services that you get before the insurance plan of yours even starts to pay. You may think that it is weird because you have that health insurance but you still have to pay on your own. Well, relax, because it is perfectly normal. All health insurances have that deductible policy. After all, the insurance company will have to make profit as well. So, it is not all free for you but at least your insurance company will help to cover everything in your expenses. It is not that hard though because the amount of money as the deductible that you pay is just the amount of money you have agreed in the policy. Even the expenses are twice as much as the deductible amount, you only have to pay the amount of the deductible only. The rest will be paid by the insurance company.
Deductible Case Examples
To make you fully understand of deductible in health insurance, below is an example case for you: John Smith has just signed a policy for health insurance. In that deal, it is written that his deductible is $400. Several weeks later, he gets sick and has to be hospitalized. The expense from the hospital that has to be paid by John Smith is $3000. With the deductible policy of $400, it means that John Smith will have to pay $400 first from his own money and then the insurance company will help John Smith to pay the remaining $2,600 of the medical expenses. That is how deductible means and works. Let us see another case: Kim Morgan has just signed a policy for health insurance. In that deal, it is written that her deductible is $500. Later the week, she gets into an accident and has to be rushed to the hospital. The expense from the hospital that has to be paid by Kim Morgan is $500. According to the policy, Kim Morgan will have to pay the deductible first. The deductible is $500 and the medical bill is $500. In this case, the insurance company would have to pay nothing at all because the medical bills can be paid with Kim’s deductible only.
Trivia About Deductible in Health Insurance
Now that you know what deductible in health insurance is and how that deductible works, you need to know all about it including the trivia. Below you will read the trivia about the deductible in the insurance company that may expand your knowledge about this particular topic.
Deductible should not make you have second thought about having health insurance. Remember, with or without the deductible, health insurance is able to lower any medical costs and expenses of yours. Indeed, you have to pay out of pocket or pay with your very own money first to reach the deductible amount. However, sometimes the deductible rate is very low and the insurance companies have discounted rate as well. In the example you can see John Smith only pay like less than 25% of his whole medical expenses. Imagine what happens if John Smith does not use health insurance. The amount of money that he has to pay will be four times as much as $400 and even more.
The deductible in health insurance is sometimes different from the deductible in auto insurance, life insurance, or homeowner insurance. In those types of insurance, you will never get the benefits of the insurance before you pay off the deductible. However, in health insurance, there are some exceptions that you can get because health insurance is related to health after all where it can be the matter between life and death. So, sometimes in the health insurance you can still get the service even before you meet the deductible. However, one insurance company is different from the other ones. That makes the policy of deductible is different as well. To avoid complication and misunderstanding, it is better to have your lawyer or to have your friends who know about insurance policy to take a look at the insurance policy you are about to sign. Make sure that you know exactly how much the deductible is and how much you have to pay per month. Considering that now you know what does deductible mean in health insurance, you can have better understanding when you read the policy.