Published November 9, 2013 | By peter m
Most insurance policies for all types of insurance have some sort of deductible as part of the policy conditions, although a deductible is sometimes referred to as an excess. The logic behind a deductible is that for any claim you may make, you retain a small portion of that claim yourself.
In addition it prevents the insurance company having to spend money to process claims that cost them more to process than the claim amount itself. There is often encouragement to take a higher level of deductible, and in return receive a significantly reduced annual premium.
Deductibles in health insurance work on the same principle but are generally for much higher amounts and can differ in several important ways from deductibles in other types of insurance. It is likely that your insurance company will have a number of hospitals and physicians and other health care practitioners who they refer to as in network providers.
These are hospitals and physicians who have signed up to the insurance company and agreed special rates with them in return for the insurance company putting work their way effectively. Any other hospital or practitioner that you wish to see who is not part of the network is referred to as out of network. This distinction is important because significant differences
in costs and levels of deductible applicable to both.
It is a level of pressure that the insurance company effectively exerts on you to make sure that you seek any medical attention or any of healthcare provider that is part of their network. The levels of deductible will be different for what the insurance company refers to as in network and out of network providers. In addition the levels of deductible can vary quite widely and can be relatively large cash amounts in relation to the annual premium that has been charged.
In addition there may be separate levels of deductible applicable to various items under your health care plan, depending on the level plan and type of cover provided. That may be different levels of deductible applicable to prescription drugs, often being distinguished by different levels of deductible for generic and brand name prescription drugs.
Most health insurance plans have other ways of making you retain certain amounts of money in relation to claims that you might be making under the policy. The most common ones are what are known as co-pay and
co-insurance provisions. It is important to look at how the deductibles work in relation to these other payments as it can sometimes be quite confusing as to how much you are actually expected to retain.