How to Select the Right Health Insurance Deductible

Jan. 14, 2009 - PRLog -- Many folks have trouble understanding the process for selecting a health insurance deductible.  It can be a confusing task to say the least.  Not only do you have to consider the deductible or deductibles, but the coinsurance maximum and co-pays and how each apply to the different plan types.

Calendar year deductibles can range anywhere from $250 to $10,000 or even higher.  In the case of a PPO, they apply to each covered person.  For a Health Savings Account compatible plan, the deductible applies to ALL covered members.

All deductibles start over on January first.  However, if you switch to a new insurance company mid-year, your new company may allow a deductible carry-forward credit towards the new plan deductible.  This credit would be for medical expense you paid to providers under the old plan deductible from January first until the date you switched plans.  Ask your agent to check to see if the new company allows this carry-forward credit.

Then there are deductibles for prescription drugs to consider.  This is a separate calendar year deductible which can apply to either generic prescription drugs or to ALL prescription drugs before the co-pays even begin.  Some plans do not offer insurance for prescriptions and may only offer discounts for using a participating pharmacy.

Most PPO plans limit the deductible amounts to twice or three times the individual deductible amount.  This would be called a family deductible.  If your covering 3 or more family members, this should be a consideration when choosing a plan.  It can impact the out of pocket expense you have to pay in a given calendar year.  Most families will not experience multiple serious illnesses in a given calendar year, however, an automobile accident could land more than one family member in the hospital at the same time.    

Coinsurance is the amount paid, usually as a percentage, after the deductible has been met.  It is usually limited to two or three times the individual maximum, called a family coinsurance maximum.  Some companies refer to the coinsurance maximum as maximum out-of -pocket expense.  This can be misleading as most companies do not include the deductible as part of the maximum out of pocket expense.  Check the definitions closely for what is and is not part of the out-of-pocket maximum.

Co-pays usually apply towards physician services conducted in an office setting.  Some include basic lab and basic X-ray as part of what is covered under the co-pay, but most do not.  Very few plans offer emergency room co-pays and if they do, you need to be careful they are not in ADDITION to the deductible.  As some companies use co-pays as a penalty.  Look for the wording “co-pay waived if admitted”.  This means the co-pay is being used as a penalty.

Co-pays can also be used for prescription drugs.  They most always apply in different amounts to generic, brand name preferred and brand name non-preferred.  Some companies will allow a slight discount in the co-pay if the prescriptions are mail ordered for a 90 day supply.  However, most have done away with these two or two and half times co-pays and only provide the mail order service as added convenience.  Just keep in mind, while it may be a convenience for you, the company does achieve a slight cost savings.

As always, be sure to keep your current coverage in place until a reputable company has offered acceptable coverage.

If you would like to obtain online quotes and professional advise for individual or family coverage, please visit http://www.advanced-benefits.com.

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