Will I Have to Pay My Deductible Before I Can Get Medical Care?

The Way It Used to Be

In the past, it was generally accepted that patients were expected to pay their copays at the time of service, but charges that counted towards the deductible would be billed after the fact.

So, if your health plan had a $20 copay for an office visit, the doctor's office would collect that when you arrived for the appointment.

However, if your plan had a $2,000 deductible and you were going in for surgery, you'd pay nothing at the time of the surgery, but would get a bill from the hospital a few weeks later.

First, they would send the claim to your insurer, where the network negotiated rate would be calculated and amounts over that would be written off. Then the insurer would pay their portion, and notify the hospital about your portion of the bill.

At that point, the hospital would send you a bill for your deductible and any applicable coinsurance.

6 Free or Low-Cost Health Insurance Options

How will your car insurance deductible impact your rate?

Based on paying $420 for collision coverage on a six-month policy, the chart below shows how adjusting a deductible can change the coverage cost. Increasing your deductible from $100 to $250 provides the greatest jump in savings, while going from $1,000 to $2,000 offers the lowest amount of savings.

Video

How Do Car Insurance Deductibles Work?

When you start an  auto insurance policy, you get to choose the coverage amounts. Your insurance premium and car insurance deductible will teeter depending on the amounts you choose. Increasing your out-of-pocket deductible will lower your monthly insurance premium.

You can choose your deductible amount for each type of insurance coverage you add to your policy, and each should be handled differently:

  • Liability insurance: Covers the cost of damages done to another person’s property or injuries they may sustain from an accident. This coverage does not use a deductible, as it’s required for drivers in most states around the country.
  • Comprehensive car insurance: Protects your car against damage from things other than a collision, like fire, theft, vandalism, severe weather, and animals. Because it tends to have lower premiums, you could get away with choosing a low deductible.
  • Collision coverage: Pays for damages to your vehicle that were the result of a collision with another car. It can often cost more than comprehensive coverage, so you may want to choose a large $1,000 deductible to help save money on monthly costs.

Personal injury protection and uninsured/underinsured motorist coverage may also have deductibles. Talk with an insurance agent to learn how to choose your deductible and car insurance premium rates for these coverages based on your state’s rates.

Consider Taking Out a Loan to Pay Your Deductible

If the damage on your car needs to be repaired ASAP, you could consider taking a loan to cover your deductible. Whether through a personal loan, cash advance on your credit card or some other form of credit, borrowing could help you get your car back on the road more quickly.

Going through an online-only lender, for example, could allow you to complete the entire process of getting a personal loan entirely from your phone or computer. Funding for many of these loans can come as quickly as one or two days after approval, which could help you get the ball rolling on repairs.

When looking over your borrowing options, be sure to consider the interest you’ll pay on the loan. A high-interest loan can make borrowing to cover a deductible a much more expensive endeavor. Get preapproval through multiple lenders to see which one can offer you the best terms and the lowest interest rate before you borrow. Experian CreditMatch™ can help you do this. Even a low-interest loan will cost you interest, though, but it’s likely to be worth it if you need your car for work or school.

How deductibles work

For dollar amount deductibles, a specific amount would come off the top of your claim payment.

For example, if your policy states a $500 deductible, and your insurer has determined that you have an insured loss worth $10,000, you would receive a claims check for $9,500.

Percentage deductibles generally only apply to homeowners policies and are calculated based on a percentage of the home’s insured value. So if your house is insured for $100,000 and your insurance policy has a 2 percent deductible, $2,000 would be deducted from any claim payment. In the event of the $10,000 insurance loss, you would be paid $8,000. In the event of a $25,000 loss, your claim check would be $23,000.

Note that with auto insurance or a homeowners policy, the deductible applies each time you file a claim. The one major exception to this is in Florida, where hurricane deductibles specifically are applied per season rather than for each storm.

Deductibles generally apply to property damage, not to the liability portion of homeowners or auto insurance policies. To use a a homeowners policy example, a deductible would apply to property damaged in a rogue outdoor grill fire, but there would be no deductible against the liability portion of the policy if a burned guest made a medical claim or sued.

 

Copay

  • A copay is a fixed amount you pay for a health care service, usually when you receive the service. The amount can vary by the type of service. You may also have a copay when you get a prescription filled.

For example, a doctor’s office visit might have a copay of $30. The copay for an emergency room visit will usually cost more, such as $250. For some services, you may have both a copay and coinsurance.

With Pivot Health’s Plan, You Can Assign Your Benefits to the Medical Provider

Pivot Health’s supplemental health insurance product, Latitude, is especially beneficial to individuals and families seeking to have more complete coverage and peace of mind.

Supplemental insurance policies generally pay benefits directly to you; that means you can use the funds wherever you need them most, such as:

  • Medical deductible or coinsurance
  • Rent or mortgage
  • Car payments
  • Childcare
  • Everyday living expenses

However, Pivot Health’s supplemental health insurance plan also allows you to assign your insurance benefits. This means you can have the benefit payments sent directly to the doctor, hospital or other facility that provides you care.

It is easy to do: When you receive medical care, you simply sign the assignment portion of the payment/disclosure statement that the doctor or facility presents to you. Then, the medical provider files the claim and is paid the applicable benefits directly from the insurance company.

In this way, the doctor or facility has a more secure arrangement for payment of their services.

Increasing Deductibles

The uninsured rate is lower than it was when the Affordable Care Act was implemented, although it has increased under the Trump administration. According to U.S. Census data, 14.5% of the U.S. population was uninsured in 2013. That fell to 8.6% by 2016, but had grown to 9.2% by 2019.

Although the uninsured rate has climbed since 2017, it is still well below the pre-ACA uninsured rate. However, some of those newly insured people have particularly high out-of-pocket costs.

The ACA limits how high in-network out-of-pocket costs can be, but the limit itself is fairly high. In 2021, health plans can have out-of-pocket costs as high as $8,550 for an individual and $17,100 for a family. For 2022, those upper caps are projected to increase to $9,100 and $18,200, respectively.

Many health plans have out-of-pocket limits well below those amounts, but deductibles on individual market plans are often multiple thousands of dollars (cost-sharing reductions lower these deductibles for eligible people, as long as they select a silver plan in the exchange).

Employer-sponsored plans have to abide by the ACA's cap on out-of-pocket costs too, but they tend to have deductibles and out-of-pocket costs that are lower than those in the individual market. In 2020, the average deductible for people with employer-sponsored health insurance was $1,644, although that did not include the lucky 17% of covered workers who didn't have a deductible at all.

Yet the Federal Reserve reported in 2018 that about four of ten of respondents to their Survey of Household Economics and Decision Making would not be able to come up with $400 to cover an unexpected bill, or would have to sell something in order to cover the cost.

That presents a conundrum when people have an unexpected but necessary medical procedure and a fairly high deductible. It also presents a conundrum for hospitals—tasked on one hand with providing health care to residents, but also needing to generate enough revenue to stay financially viable.

Requiring upfront payment of at least part of the deductible is one way for hospitals to avoid situations in which patients end up unable to pay their bills.

How risk averse are you?

Deductibles are about more than just your finances, though. Picking your deductible amount is a lot like gambling. You’re hedging your bets, deciding how risk is shared between you and your insurance provider. Insurance is meant to be a safety net that your family can rely on when there’s an unforeseen event. Whether it’s lender-required insurance or not, a policy can help homeowners start over if something bad happens. Most of us would be at a total loss without it.

Yet for some of us, taking on more risk in exchange for lower premiums is worth it. Redistributing some of your home’s risk to yourself lets your provider reduce your premiums. For others, assuming more risk would be too financially and physically stressful.

Will Deductibles Affect Your Premium?

Before you choose your deductible, take the time to fully understand how basic car insurance works. Getting the full picture can help you become more confident on the road.

Your car insurance deductible is how you share the responsibility to cover losses with your insurance company. That means that if you choose a lower deductible, you will ended up paying a higher premium every month.

A higher deductible may seem beneficial because it costs a lot less up front or for monthly payments. However, you must remember you’ll be required to pay a larger portion of your insurance claims if an accident occurs.

You should choose a high deductible if you wish to pay lower monthly premiums and if you can afford that rate in the case of an accident. Select a low deductible if you can’t afford a high one or if you live in a busy metropolitan area where you’re more likely to get into an accident.

Talk to your auto insurance agent to discuss your deductible options. They’ll take a close look at your situation and walk you through choosing the best premium and deductible for your budget.

Can I Lower My Deductible Before Making A Claim?

It’s important to take some time to think about your auto insurance deductible before making a commitment. You will not be able to change your deductible amount right before filing a claim.

Choosing your deductible amount is usually decided at the beginning of your policy and can’t be changed until that policy expires. Also, because the deductible amount varies based on your premium and vice versa, you can’t make this switch halfway through a policy.

High- vs. low-deductible plans

High-deductible, low-premium insurance plans have gained popularity in recent years. These insurance plans allow you to pay a small amount each month in premium payments.

However, your expenses when you use your insurance are often higher than that of a person with a low-deductible plan. A person with a low-deductible plan, on the other hand, will likely have a higher premium but a lower deductible.

High-deductible insurance plans work well for people who anticipate very few medical expenses. You may pay less money by having low premiums and a deductible you rarely need.

Low-deductible plans are good for people with chronic conditions or families who anticipate the need for several trips to the doctor each year. This keeps your up-front costs lower so you can manage your expenses more easily.

Pivot Health Can Be at Your Side When You Need It Most

High deductibles have made supplemental health insurance even more necessary and valuable to more individuals and families.

Some people refer to these types of insurance plans as “insurance for your high deductible health insurance.” With a Pivot Health supplemental insurance plan, you can have the peace of mind of knowing that in the case of a serious illness or accident, you will not be in the vulnerable position of having to “show the money” before you receive medical care.

With careful financial planning that includes providing for these types of situations, you will be in a position to focus your time and attention on obtaining the appropriate medical care and emphasizing recovery for you or your family member patient.

In addition, Pivot Health’s supplemental insurance plan has a number of other advantages through membership benefits that can help you and your family in many situations:

  • Unlimited doctor consultations by phone or video
  • Up to 75 percent savings on prescription drugs
  • 15-40 percent discounts on vision care (eye exams, lenses, frames and contacts)
  • Roadside reimbursement
  • Discounts on X-rays, MRIs, CT scans and more

Pivot Health’s programs—from supplemental health insurance programs to short-term health insurance programs—help you handle the future today.

Tags