What is a NC Health Insurance Deductible ?
A health insurance deductible is one of the most important aspects of your NC health insurance policy. In order for you to purchase the right plan health plan it is imperative that you understand what a deductible is and how is works.
In general, the deductible is the amount you owe before the insurance company will pay its share of medical expenses that are subject to the deductible. Notice that I said “subject” to the deductible. Not all expenses are subject to the deductible. Some policies will have co-pays that may cover a portion or all of prescription costs and doctor visits. Some policies make everything subject to the deductible. This is why you must know what you are buying.
- Hospitalization
- Inpatient/outpatient surgery
- Major Diagnostics – CAT scans, MRI, CT scans, etc
- Ambulance
Here’s an example of how a deductible will work. Let’s say you had an overnight stay in the hospital for an illness and incurred $5,000 of medical expenses that were all subject to the deductible. If you had a $1,000 deductible on your health plan you would pay $1,000 before the insurance company pays any portion of the bill. This leaves $4,000 left that must be paid either by you, the insurance company or a combination of the two. If you have coinsurance, say an 80/20 plan, then you would pay 20% of the remainder ($800) and your insurance company would pay the remaining 80%. Your total out of pocket expense for this claim would then be $1,800.
Deductibles usually work on a calendar year basis. However some carrier’s deductibles are based on the effective date of your policy. This is another important feature to know because you could use this to your advantage for planned medical procedures. If your deductible is set to reset on January 1st and you have not yet met your deductible you may opt to move a scheduled procedure that was planned for December to sometime in January. This way it would be counted against the next year’s deductible and would offset any unplanned medical expenses that may incur in the New Year.
Should you choose a lower or a higher deductible? By taking on a higher deductible the insurance companies will give you a lower premium. You want to make sure that you take a deductible that you can afford but you also have to look at the premium savings involved. For instance if the premium difference between a $1,000 deductible and $2,000 deductible was $150/month you would be wiser to go with the $2,000 deductible because you would save $1,800 in annual premiums which more than offsets the higher deductible. This is not an uncommon scenario.
The bottom line is when you are choosing a NC health insurance plan it is crucial that you understand how the deductible works on each policy. Contact Southeast Insurance Solutions, Inc. today for your insurance needs.
