Health insurance deductibles can be confusing.
They’re often one of the most misunderstood aspects of health insurance. Worst of all, they can impact your finances if you need help understanding how they work.
You must pay a deductible before your health insurance provider begins to fund its portion of covered medical costs. In other words, it’s the amount you spend on health care before your insurance kicks in.
So, how do you know whether your deductible is high or low? What is an appropriate health insurance deductible? And how do you decide which is best for you?
In this blog post, we’ll answer all those questions and more. Read on to learn all about health insurance deductibles.
How do health insurance deductibles work?
Before your insurance provider starts to pay for medical care, you must first pay a deductible. If your deductible is $1,000, for example, you will be responsible for the first $1,000 of covered medical costs. You must first pay a deductible before your insurance provider begins to pay for medical care.
Most people choose to have a deductible that they can afford to pay out-of-pocket if they need medical care. The higher your deductible is, the lower your premium (monthly cost) will be. A high deductible plan is sometimes called a “catastrophic” plan. It covers major medical expenses only after you have met your deductible.
Suppose you have a Health Savings Account (HSA) eligible plan. In that case, you may use tax-free money from your HSA to pay for your deductible and other out-of-pocket costs.
What’s a Deductible?
Before your insurance plan pays for medical services, you must first pay a deductible. If your deductible is $1,000, for example, you will be responsible