The health insurance policy provides copay rules, such as when a copay is required and how much is paid for each type of provider, facility, service and procedure. Copay amounts often differ for visits to specialists and primary care physicians – or for care provided by different types of facilities. Copays and deductibles are both features of most insurance plans. A deductible is an amount that must be paid for covered healthcare services before insurance begins paying. Rather than making the subscriber meet a minimum balance, health insurance with no deductible means the health insurance company will make payments up front, paying out for doctor visits, emergency care, or other events.
No-deductible health insurance is a kind of health insurance that doesn’t include a required up front payment by the enrolled member each year. Rather than making the subscriber meet a minimum balance, health insurance with no deductible means the health insurance company will make payments up front, paying out for doctor visits, emergency care, or other events. The down side is that having this kind of policy means those who receive the insurance will generally pay more for it than they would if it included a health insurance deductible.
A lot of no-deductible health insurance plans are employer-based healthcare plans. There are many key differences between the majority of employer-based plans, and most of the self purchased health insurance plans on the market. One main difference is that employer-based plans are forced to cover active employees, where self-purchased plans can deny an applicant for many reasons. With employer-based plans, the higher costs to the individual subscriber, who is the employee, are offset by the fact that the employer is most often paying part of the cost of the policy.
On the other side of the spectrum, some self-purchased plans are the opposite of no-deductible health insurance. High-deductible plans make the subscriber pay up to several thousand for any medical care in a given year. The positive side to these plans is that premiums tend to be lower, and if the health care costs exceed a certain cap (the deductible plus other related costs) the health insurance will pay additional costs, allowing families to estimate their maximum annual out of pocket cost, and budget for medical emergencies. These kind of high-deductible plans are called “catastrophic” health insurance plans.
In a rush to anticipate possible changes related to recent healthcare reform, a lot of insurance companies are changing the way they pursue policy offerings to consumers. Some of the newer plans may be no-deductible health insurance, and some may include significant deductibles. Both kinds of options will appeal to a certain kind of consumer or household, depending on how people like to budget their medical expenses
Yes, there is such a thing as Zero Deductible insurance. And you’re probably reading this because you’ve recently been disappointed (or enraged) by the large sum you had to pay, thinking your insurance was supposed to cover it. Yes, the unicorn zero deductible exists, but it’s not exactly how we imagine it to be, nor how we want it to work. A deductible is a major part of any insurance contract, whether it’s homeowners, car, business or health insurance. There’s no way around the deductible. You either pay a high deductible or a low deductible. In some circumstances and policies, there is such a thing as a zero deductible . . . but it comes with a price, and it’s useful and beneficial for particular cases, but costly in other cases. Your job is to figure out your sweet spot.
Understand Your Insurance Plan
Time and again, we see how new insurance buyers complain about their policies. It turns out they are unclear about the details around deductibles, premiums, coinsurance, and copays. Unfortunately, insurance customers don’t get involved enough with their policies until it’s too late.
There’s nothing more frustrating than having a minor medical emergency, then seeing your bill a few days later that says you owe $400 for a 10-minute visit with the Physician’s Assistant at the Urgent Care facility. This is the same frustration you get when experiencing a little fender bender, and the cost to repair your car is lower than the deductible you have to pay before your insurance kicks in to cover you repair.
If you’re not careful or tuned with your insurance coverage, the expense you incur from a doctor’s visit, car repair, or home disaster can catch you off guard, and potentially leave you in credit card debt. After going through the frustrations of realizing your up-front, out-of-pocket expense, you end up questioning whether or not you made the right decision on your insurance.
What a Zero Deductible Insurance Policy Means
A deductible is the amount you have to pay in that year before your insurance company covers the costs stated in your plan. A zero deductible plan means that you don’t have to pay for any costs upfront before receiving your benefits; your insurance company will cover your allowable claims right away. However, this only means you pay a higher monthly premium.
A zero deductible can mean different things for different types of insurances. For homeowners insurance, having a high deductible can mean annual savings since your monthly premium will be lower. You only pay a deductible each time you make a claim. According to an insurance.com analysis, the average homeowner makes a claim only once every 10 years, so with this in mind, lowering your deductible to $500 from $2,500 can save an average of $260 per year. That may not seem much, but you can see how deductibles play into your insurance plan, and how you’ll need to consider all your risks and factors. Do the math.
For health insurance, a zero deductible could make the world of difference especially if you are a big family with kids, have a chronic condition, know you will undergo medical treatment, or require ongoing medication. A high deductible plan would require you to pay out-of-pocket costs before your insurance kicks it. Consider the high cost of refilling medication each month, x-rays, and other services related to your health needs. If you don’t have a large cash reserve (or a hefty credit line) a zero deductible plan, in which you pay a higher premium each month could prove to be more “doable” than paying large one-time sum expenses.
A zero deductible plan for car insurance also has a different maze of factors to consider. Although you can’t control the unforeseen freak accident, you can control your driving habits and avoid accidents. It is typically advisable to increase your collision damage deductible and pay a lower premium, if you are a safe driver. The amount of annual savings you get from increasing your deductible for car insurance is often not enough of a savings to get a high deductible plan. And it makes a difference if you’re 50 versus 20 years of age.
Is It Better To Have No Deductible For Health Insurance
Is a Zero Deductible Plan Right for You?
Health Insurance With No Deductible
There are many factors to consider when choosing the right deductible and it’s important that you discuss all your options with a licensed insurance advisor. Do not haphazardly commit to an insurance plan, simply based on price alone. Choose an independent insurance advisor so they can shop for the best company on your behalf.