Deductible
Deductible is the amount of money an individual needs to pay out of pocket for healthcare services before their health insurance plan starts to cover costs.
Example #1
For instance, if a health insurance plan has a $1,000 deductible, the policyholder must pay the first $1,000 of covered healthcare expenses before the insurance company begins to pay.
Example #2
If someone goes to the doctor and the bill is $800, they will need to pay the full amount as it is below the deductible limit.
Misuse
One common misuse of deductibles is when employers set excessively high deductibles, making it financially burdensome for employees to access necessary healthcare services. This can lead to employees avoiding seeking medical help due to high costs, which can negatively impact their health in the long run. It is essential to protect against such misuse to ensure employees can afford essential medical care without facing excessive financial barriers.
Benefits
Deductibles help control healthcare costs by making individuals responsible for a portion of their care upfront. This can lead to more cost-conscious decisions when seeking healthcare services and can help individuals understand the actual cost of medical care.
Conclusion
Understanding deductibles is crucial for employees to effectively navigate their health insurance coverage. It's important for employers to set reasonable deductibles that balance cost-sharing with ensuring employees can access necessary medical care without financial strain.
Related Terms
Health InsuranceEmployee Benefits