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Glossary of Health Insurance Terms To Know


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A deductible is the amount that you pay each year before the insurance company pays anything for your medical expenses or prescription drugs.  Until the deductible is met, you will not receive any reimbursement for your claims.

A deductible is generally payable on an annual, calendar year basis. Deductibles can range from $0 to $6,000 or more.

For example, if you receive a medical bill of $2,000, the bill is your first bill of the calendar year, and your deductible is $500: The insurance company will ignore the first $500 of the bill in calculating the payment and only pay a percentage of the remaining $1500.  You are required to pay the $500.

A deductible reflects the idea that the purpose of health insurance is to cover costs that are unacceptably high. A deductible also helps to keep premiums down because it also eliminates the costs of administering minor claims that an insurance company would have to cover if it paid for 100% of health costs..

For information about what happens if you have both a deductible and co-insurance, click here.

NOTE: Insurers take no interest in the deductible beyond the fact that the insurer doesn't have to pay any money until the deductible is used up. Sometimes doctors are willing to negotiate the amount you have to payand possibly even eliminate payment of the deductible.

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