The minimum balance that a policyholder pays before the insurance companies start paying their medical bills is called a deductible in health insurance. It has become next to impossible even to pay medical bills for a small treatment nowadays. The medical bills are soaring high and are putting a hole in the pockets of regular people. Health insurances provide financial backup when we need them the most; i.e., at the time of paying medical bills.
Therefore, many insurance companies started medical health insurances to help people pay medical bills for themselves and their loved ones without thinking of medical expenses. These policies/insurances can reimburse up to 80% of the medical bills. But these medical health policies come with a jargon called health insurance deductible.
Not everyone is blessed with good health, but it doesn’t mean that one has to die of all the medical expenses that occur for the treatments of some terminal illnesses. Hence, these health insurances play a very important role. In this article, we will elaborate more on the use of deductibles in health insurances, their meaning, their uses.
What is Deductible in Health Insurance?
Assume Shikha has a medical cover of 10 lacs. She goes for an eye treatment which costs her about rs.12,000. Now you wonder, in this case, what is deductible in health insurance? The answer is that the policy covers eye treatments of about rs.10000 every year. Because of this she only gets a cover of rs.2000 from the policy and the rest amount she will have to pay on her own.
Therefore, all policyholders need to read policy terms and wordings thoroughly before signing them. Because in such cases, one can opt for policies with no deductibles. Deductibles in motor insurances are also of the same nature.
Illnesses and diseases are a part of life and the burden of paying for the treatments can be reduced using medical health insurance. These policies reimburse the policyholder’s medical expenses and pay the care provider directly.
How Does Deductible Work in Health Insurance?
Deductible in health insurance is the fixed sum of the amount that a policyholder has to pay before the issuer insurance company starts paying up to cover the rest of the medical bills. exceeds the deductible that is over and beyond the deductible. For high deductible health, In other words, the insurance company is liable to pay the amount claimed only when its insurance policies, the premium is lower. And the low deduction health insurance has a higher premium.
Before, signing any deduction health insurance customers need to know what is deductible in health insurance? How much is the deduction health insurance? The date when the deductible rolls over? What doesn’t count towards the deduction health insurance? Deductible vs copay. Whether they have different deductibles and how often they can meet the deductible? Readers please Understand if we need insurance for our vehicles, then how important is it to have medical insurance for ourselves. It saves us all from any kind of injury or illness expenses for long.
Types of Health Insurance Deductible
Two types of deductibles namely, compulsory and voluntary health insurance deductible in India. Now people ask what is a good deductible for health insurance? Let’s explore a little to get the answer to this question.
1. Compulsory Deductible
It is governed by the insurance company and a policyholder has to pay the compulsory deductible up to the limit. The premium remains the same as the amount of the deductible. At the time of claim, policyholders only pay the compulsory deductible set by the insurance company at the time of issuing the policy.
2. Voluntary Deductible
It is a health insurance deductible where the policyholder needs to opt for such deductibles. If the deductible amount is higher, the premium is certainly lower. At the time of claim, policyholders only pay the voluntary deduction health insurance set by the insurance company at the time of issuing the policy.
Readers, we hope we have been able to make you understand what is deductible in health insurance in detail today. Now let’s figure out what is deductible vs copay in health insurance.
No matter what your age is, what your gender is, every individual must opt for deduction health insurance or non-deduction health insurance.
Advantages of Health Insurance Deductible
It is not hard for policyholders to make sense of their deductible in health insurance because of the following benefits:
- Monthly premiums are lower in deduction health insurance.
- It covers all the basic preventive services like flu and annual physical exam.
- Policyholders can opt for pretax HSA (Health Saving Account)in which policyholders do not have to pay taxes.
- It is an alternative to pricy medical procedures.
- It avoids unnecessary claims from the policy the policyholders.
- It provides financial support to policyholders from high and unexpected medical expenses.
- It covers screenings and shots expenses in some cases almost at no cost.
Disadvantages of Health Insurance Deductible
Time to discuss some drawbacks of deduction health insurance:
- Patients have to pay medical bills until they reach health insurance deductibles.
- Routine blood work and lab tests are not included/covered.
- It does not include any follow-up procedure costs.
- In case of any unfortunate emergencies, policyholders will get some coverages but they are more likely to be expensive.
- At the time of claim, policyholders have to shell out a lot higher amount before the insurance starts to cover medical expenses.
- Policyholders have to pay a premium to stop deduction health insurance from the policy.
Deductible vs Copayment
It is a very common mistake in health insurance policies. A co-payment is determined as a pre-defined sum of the amount which the policyholder has to pay each time, they get any health care service. Copays are a fixed fee and a percentage. It is an outpatient expenditure and includes emergency room visits. A larger copay means lower premiums.
A deductible on the other hand is a fixed sum of the amount that a policyholder has to pay each year before their health insurance kicks in completely. It is a rupee amount. It is like a tax we pay every year.
There are a lot of different factors involved like medical histories, present medical conditions, lifestyle, good physical condition, etc. that will let a policyholder opt for a deductible or not in their medical insurance. Therefore, customers need to go through all the health insurance details and understand the terms and conditions before signing up for it. Nowadays, insurance companies are providing the facilities of adding deductibles or not in medical health insurance from the comfort of your home!
Hence, it is up to an individual to decide whether copay is better or deductible a sit works differently for all. So, take it as an investment for your body and your well-being. Ensuring one’s health is insured is the biggest responsibility for oneself.
Hope It has cleared your doubt about what is deductible in health insurance?
Deductible in Health Insurance- FAQs
Q1. What is deductible in health insurance?
Ans- A health insurance deductible is a fixed sum of the amount that a policyholder has to pay each year before their health insurance kicks in completely that is a rupee amount and is like a tax, we pay every year.
Q2. What is a good deductible for health insurance?
Ans- A premium-deductible policy is a good deductible for health insurance.
Q3. What are the two types of deductibles in health insurance?
Ans- Compulsory and Voluntary are the two kinds of deductibles available.
Q4. Does all health insurance have deductibles?
Ans- No, there are health insurances with no deductibles at all too.
Q5. What is the purpose of a deductible in health insurance?
Ans- The purpose of deductible in medical insurance is to provide cover for heavy medical bills.
Q6. What is the main difference between Deductible vs Copayment?
Ans- Copays are a fixed fee and a percentage whereas deductible is a rupee amount that is like a tax we pay every year.
Q7. List three drawbacks of deductibles in health/medical insurance.
Ans- At the time of claim, policyholders have to shell out a lot higher amount before the insurance starts to cover medical expenses, policyholders have to pay a premium to stop deductibles from the policy and patients have to pay medical bills until they reach health insurance deductibles.
Q8. List three advantages of the health insurance deductible.
Ans- Policyholders can opt for pretax HSA (Health Saving Account) in which policyholders do not have to pay taxes, it provides financial support to policyholders from high and unexpected medical expenses and it coves basic preventive services as well like flu and annual physical exam.
Q9. What is health insurance all about?
Ans- Insurance that covers all types of medical expenses that arises due to an illness/ terminal sickness. These expenses include hospitalization costs, cost of medicines, screening costs, doctor consultation fees, emergency medical expenses, etc.
Q10. How can I buy a high deductible policy?
Ans- If a customer has good medical history and is young, there are high chances of them getting high deduction health insurance.