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What is a deductible?

Deductible is a term you might have heard in connection with your health insurance costs. But what exactly is a deductible? Here is what it actually means: Your annual deductible is typically the amount of money that you, as a member, pay out of pocket each year for allowed amounts for covered medical care before your health plan begins to pay. This excludes certain preventive services that may be automatically covered. Deductibles can be high or low, depending on your project, which may affect how you pay for health care costs.

What is an embedded deductible?

The first is an embedded deductible, meaning that there are two deductible amounts within one plan: single and family. The single deductible is embedded in the family deductible, so no one family member can contribute more than a single amount toward the family deductible.

 

What is Coinsurance?

Coinsurance is a cost-sharing arrangement in health insurance where the insured individual is responsible for a percentage of covered medical expenses after meeting the deductible. After the deductible is satisfied, the insurance company and the insured share the costs of covered services according to the coinsurance percentage. For example, if the coinsurance is 20% and the medical service costs $1,000, the insured would pay $200 (20% of $1,000) while the insurance company would cover the remaining $800. Coinsurance helps individuals share the financial responsibility of healthcare expenses with the insurance company and can vary based on the specific health insurance plan and the services received.

 

What is a Copay?

A copay is a fixed out-of-pocket amount paid by an insured for covered services. It is a standard part of many health insurance plans. Insurance providers often charge co-pays for services such as doctor visits or prescription drugs.

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What is an Embedded Deductible?

An embedded deductible is where each family member has an individual deductible in addition to the overall family deductible. When a family member meets his or her deductible before the family deductible is reached, the insurance company will begin paying according to the plan’s coverage for that member. If only one family member meets an individual deductible, the rest of the family still has to pay their deductibles.  Out-of-pocket expenses used to meet a separate deductible are counted toward meeting the family deductible, which is usually twice as large as an individual deductible. However, after an individual completes his or her deductible, coinsurance or copays typically will not count toward the family deductible. Once the family deductible is met, all family members will have medical expenses paid according to the plan’s coverage, even if they have not met their deductibles.  The POS 1000, POS 750, and the OOA POS 750 have an embedded deductible.  Embedded Deductible Example:  The Lee family has the POS 1000 plan that covers Mr. and Mrs. Lee and their two children. Each family member has a $1,000 individual deductible, and they have a $2,000 family deductible. Mr. Lee met his $1,000 deductible after going to the emergency room in February. Mrs. Lee had an outpatient surgery and met her $1,000 individual deductible in March, which means the family deductible of $2,000 has now been met.  The insurance company will cover any further medical care for anyone in the family according to the plan benefits.

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