Common health insurance questions: How does a deductible work?

Knowing key terms frequently used in your health care policy can make all the difference when deciphering medical bills. Coinsurance, copayment, deductible, premiums and other terms can become confusing if you are unsure exactly how each works within your insurance policy. Your deductible, a fixed dollar amount you would pay before coinsurance kicks in, can range from $1,000 for an individual to $27,000 for families. The confusing part is what actually counts toward your deductible versus what services are not covered.

Copayments for a prescription or doctor visit do not count toward your deductible. However, most plans only cover lab work and X-rays after deductible, which means you would pay for these services and that money would be calculated into your overall deductible amount. As part of the new mandate, preventive care services are covered at 100 percent for most plans; because you do not pay for these services, they do not count towards your deductible.

Once you have reached your deductible amount, your coinsurance rate would then kick in. This is typically a 70/30 split, where your insurance company is responsible for 70 percent while you are expected to cover the remaining 30 percent until you reach another fixed dollar amount – this is your coinsurance maximum. Once both the deductible and coinsurance maximum have been reached in a calendar year, your insurance company would then pay 100 percent for future services, which is called your out-of-pocket maximum and does not include money spent on services not covered by your plan.

To learn more about deductibles, out-of-pocket maximums and other key terms used in your health insurance policy, visit the BCBSM website. Have other questions about health insurance? Ask a question, see answers and learn more on Health Insurance Central.

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