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Health Insurance Deductible

How was annual enrollment? Hopefully, a little easier this year given a few previously published tips. Now I’m sure you are wondering how your new benefits are going to work. It’s almost the beginning of the year, which means you mostly likely will be paying out of pocket again for healthcare to meet that outrageous, lovely, new health insurance deductible.

You might be lucky, if your new plan has a $0 deductible or is a discount plan. This means your health insurance company will start paying for your healthcare costs starting on 1/1. Most likely you, like myself, are not that fortunate. The big question is how much will you need to pay to meet your deductible? The simple and ominous answer is it varies.

Check to see what is excluded from your deductible, usually these costs are listed as co-pays. Any services listed in your Benefit summary as a percentage, co-insurance, or something other than a co-pay probably applies to the deductible. Let’s break down what “applies to deductible” means. If your deductible is $1,600, you have to spend $1,600 before your health insurance will start sharing costs. The good news is you don’t pay it all at once. You will pay for services as you use them, most typically for prescriptions, lab tests, and doctor visits. If you have a copay for these services, no need to worry, your deductible is not important unless your need more serious healthcare.

At the beginning of each benefit year, starting usually on January 1st, your health insurance requires you to pay a certain percentage of the plan. How do you estimate these costs? If your doctor, wellness, and pharmacy are a flat amount, for example $15 dollars, your deductible does not matter in these instances.

My plan has a $1,200 deductible, but I only need to meet these costs if I am admitted into the hospital or have outpatient surgery. When I go to the doctor, I pay $15 dollars for visits. At the pharmacy, I pay nothing for generic drugs and $30 for brand name prescriptions. Unless, I’m having a more serious health issue, my deductible is insignificant.

If your deductible applies to doctor visits and prescriptions, basically you will be paying for all your health care services until you’ve spent enough to meet your deductible. In this case, $1,600.  Again, this is not paid all at once, just as you go to the doctor or pharmacy. If this is your type of insurance, it’s probably good to start saving a little each month. For example, if you are paid bi-weekly, set aside $62 a paycheck for a $1,600 deductible to cover your costs. This will also help you prepare for any onset of illness, where you need to pay the deductible up front. It’s good to be prepared for the unknowns, your deductible just doesn’t have to be one of them.

Let’s discuss the good news. Once you’ve met your deductible, you don’t have to pay it again in that year. Still have questions? Please email me at healthcaredeciphered@gmail.com or leave a comment below.

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