Knowing what a plan deductible means, was the first thing that I had to understand when I began marketing health insurance plans. A deductible is the key element in every health insurance plan, other than HMOs.
When prospects come in or call the shoppe for service and are currently covered through COBRA or private coverage, 99% are unaware what their plan deductible is...even if they are paying over a $1,000/m for coverage. The most common answer to an inquiry on current benefits is the amount of office visit and prescription drug copays.
Another benefit prospect are unfamiliar with is the negotiated/contracted rate. No matter if you are paying $100/m for coverage or $2,000/m, one common element is that the insured has access to the network of providers through their insurance carrier. This is known as a PPO. When services are rendered at a participating provider, the insured receives maximum plan benefits with services being discounted between 30-70%. This discount is known as the negotiated/contracted rate. This is the amount that the provider is allowed to bill since they have a contract with your insurance carrier.
Expenses that apply to the deductible are paid for at this contracted rate.
So...as for the plan deductible, this is the amount that the insured must pay in covered expenses at the negotiated/contracted rate, prior to the insurance carrier beginning to pay the selected coinsurance (percentage). If there are more than one member on a plan (spouse, family), than there will be a separated deductible per member, with majority of carriers requiring up to 3 deductibles to be met.
What are deductible expenses?
- Outpatient Procedures
- Inpatient and Outpatient Diagnostic Testing
- Emergency Room (dependent on insurance carrier and plan)
- Inpatient Hospitalization
- Durable Medical Equipment (DME)
- Prescription Drugs (dependent on insurance carrier and plan)
- Office visits when there is not a copay
- Outpatient Therapy
- Chiropractic (limited benefit with each carrier with $1,000 max in annual benefits)
When searching for plans carriers offer many deductible options, some that even decrease if not satisfied. Choosing a lower deductible is the more expensive plan as you are asking the carrier to begin payment quicker as the insured's liability is much lower. Choosing a higher deductible lowers premium as more expenses are onto the insured prior to the carrier beginning payment.
Choosing a plan with office visit copays will cost more than plans without and if office visits are frequent, the amount paid in copays has not applied to the deductible. Saving premium to go without a copay, will have the insured paying the negotiated/contracted rate, that is applied towards the deductible...chipping away at the annual exposure on can have on a large claim.
Plans that are compatible with a Health Savings Account (HSA) have a different type of deductible than traditional plans of coverage. With HSA compatible plans, the deductible is collective for a family instead of separate per member. Once the deductible is met all members of the plan are covered at 100%.
It can be confusing and the shoppe is here to help :)
Jordan
