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What is a deductible for health insurance and how does it work?
In the world of health insurance, many terms are confusing. Anyone trying to buy a health insurance policy may not know how the plan works. In order to make informed decisions, it is essential to understand what the different terms mean. In this blog, we are going to discover what deductible is and how it works.
What are health insurance deductibles?
A health insurance deductible is a specified amount or capped limit you must pay first before your insurance begin paying your medical costs.
How does it work?
For instance, if you have a $500 deductible, you need to pay the amount from your pocket before your insurance plan covers the rest of the charges. It may take one doctor visit or several visits to reach the deductible.
The deductible is directly paid to the doctor or clinic. Suppose if the doctor charges you $200 on the first visit, you need to pay the fee directly to him. Once you have met the deductible amount, the insurance provider will start paying for the medical expenses covered in your plans.
When the policy period starts, the deductible automatically resets to $0. After the policy starts, policyholders are responsible for paying their deductible amount until it is met again.
What is a high vs. low-deductible plan?
Do you know what has become popular these days? Low-premium insurance with high-deductible! In these plans, policyholders pay a small charge each month in premium payments.
Basically, in a low-deductible plan, a person has to pay a higher premium but a lower deductible. High-deductible goes well with people who have very few medical expenses. Here, you may pay less initially for premiums and get a deductible that you may not need to meet if you do not need to use the insurance.
Low-deductible plans are ideal for people or families who take several trips to a clinic or hospital. This keeps your up-front costs lower so you can manage your expenses more easily.
What are the types of deductible?
Per incident deductible– Per incident deductible is the type of deductible where you pay the chosen deductible amount for every illness or injury after which the policy will start paying based on the coverage of that plan. You need to pay a deductible for every new incident you claim for.
Annual deductible– It is a deductible you meet only once per year or for the time you are on the plan if it’s less than a year. This is a fixed dollar amount that you need to pay for the covered services for a calendar year.
How to choose the right deductible?
The answer to this question depends largely on the number of people you are insuring, and how many doctors visits you may have in a year. While a high-deductible plan is great for people who rarely visit the doctors, a low-deductible plan may be best for a larger family who frequently visits doctors’ offices.
Selecting a high-deductible plan saves a lot of money because you are prepared to pay medical bills upfront. Low-deductible plans are suitable for people or families with frequent medical illnesses. Doctor visits or emergency needs can quickly add up if you are on a high-deductible plan, but the latter plan lets you better manage your out-of-pocket expenses.
Can Visitor Guard® help?
Visitor Guard® offers a diverse range of various comprehensive and affordable visitor health insurance plans for visitors to the USA. We’ve got your back for all your travel healthcare needs. We help visitors, travelers, and students pick the right medical insurance plan with the right coverage and deductibles.
Do give us a call if you wish to purchase a health insurance policy.