You will also want to watch carefully to see which services – if any – a plan covers through copays rather than having you cover them through your health insurance deductible. Once you have paid your $2 copay in full, the health plan begins paying their share of the cost. For instance, after your deductible is met, your insurer might cover 80% of your medical expenses.
You might still be responsible for copayments or coinsurance, even after you have met the $1,000 deductible, but your insurance company pays at least part of your costs. Your insurer does not pay for any claims until you have spent the out-of-pocket deductible. Before reaching your deductible, you usually pay out of pocket the full amount of covered expenses.
The deductible is a preset amount that you might have to pay out of pocket before your plan starts paying to cover costs. As the year begins on your plan, you pay 100% of your medical expenses to a health care provider or hospital until your total out-of-pocket costs are the same as, or meets, your deductible. The amount you pay toward your deductible, co-payment, and coinsurance are counted against your annual out-of-pocket maximum, the total amount you have to pay before your insurance plan starts paying 100 percent. Once you have met the deductible and co-insurance payments to reach your out-of-pocket maximum, your plan pays 100 percent of your allowed amount to cover services the rest of the plan year.
If you need medical services that cost $3,000, you would pay a $2,000 deductible, then your plan would pay the rest, or some portion, of the remaining $1,000. For example, if you have a plan with a $2,000 deductible, you are fully responsible for the first $2,000 in medical expenses, at which point your insurer begins sharing in the costs of the health services. With this kind of deductible, paying a deductible does not start at the initial point of medical costs. Many insurance plans will cover some preventive services without asking you to pay a deductible or co-pay.
For example, plans that are ACA-compliant do not have any deductibles for preventive care services. Another implication about deductibles is that many insurance plans handle prescriptions differently from other services. Some plans set aside a separate deductible for some services, such as prescription drugs. Many plans will cover some services, such as an exam or a disease-management program, until you meet the $2 minimum.
All Affordable Care Act (ACA) plans cover the full cost of preventive services, even if you have not met a deductible. If you have individual coverage, you might pay a single deductible for most medical expenses, and another deductible for the cost of prescription drugs. Each plan is different, so premiums, deductibles, coinsurance, and copays may differ in value.
When considering supplemental health coverage, compare a plans premium costs with the deductible amount and available savings. If your plan has a high deductible, adding a health savings account or supplemental coverage could help you manage that expense over time. If you would rather pay higher amounts each month to get security and predictability from lower out-of-pocket costs for higher-cost health care, you might like to see your health plan feature a lower deductible. If you require significant amounts of care or need costly medical services, a lower-deductible plan might be worth considering, since your insurance company will begin covering costs at a lower rate than in higher-deductible plans.
Plans can have varying deductibles for different treatments or services. The types of services covered by a health plans deductibles will vary as well; some plans will apply the deductible to almost all services, while others will cover a wider variety of services at a cost-sharing level before achieving a deductible (used for other services). If your health plan covers you with other dependents, you might have a separate deductible, which applies to each individual, and a family deductible, which applies to your entire household.
In other words, you are responsible for paying for some of your health care costs on your own, and your insurer only begins covering costs once you have met the deductible. For services that require a co-insurance, not a co-payment, you pay the entire cost of the service before the health insurance deductible is met (and, once again, the full cost means the amount that your insurer has negotiated with your medical provider, not the amount the medical provider bills). Your insurance company then covers your claims through the end of the plan year, although you share in these costs via either copayments or coinsurance. Once you have met the annual out-of-pocket limit (including the health plans deductible, coinsurance, and copayments), your insurer pays 100% of the remaining in-network, medically necessary charges, as long as you keep following your health plans rules regarding prior authorizations and referrals.
In these plans, generally, any money you spend on medically necessary care counts against the health insurance deductible, provided that it is a covered benefit of your health plan and that you follow your health plans rules regarding referrals, prior authorizations, and using a provider that is in-network when required. This means once you pay the deductible that year, your health plan benefits kick in, with the plan paying 100% of your covered health costs the rest of the year. Once you pay your deductible, Medicare pays the Medicare portion of the amount that is approved by Medicare, and you pay your own portion (coinsurance and deductible). Researchers think that this kind of deductible makes high-risk individuals less likely to have health costs exceeding their maximum deductible, and, conversely, increases these types of insureds price responsiveness for their medical services, which may eventually lower their out-of-pocket costs.