You’ve heard about deductibles, premiums, pre-existing conditions and all kinds of confusing terms to do with healthcare. We’re going to break down one of them into simple terms: your deductible.
A deductible is simply the amount of money you self insure for healthcare before the insurance company starts paying benefits. If you have a $3500 deductible, that means you’re responsible for $3500 of expenses starting at the beginning of the policy. But once you’ve paid that $3500, the insurance company starts paying a portion of your care (Coinsurance) until you have reached your Maximum Out of Pocket.
You might be thinking, “Why do I have a Deductible? Well it really goes back to the basic principal, “Only buy insurance to pay for the things you can’t pay for”, reserve your premium dollars for broader coverage. Example: you may self insure the first 2500.00 a year to reduce your premium amount to fund Dental coverage, Disability coverage or take the difference in premium to fund an HSA account.
Say you’re a healthy 28-year old who visits the doctor only a handful of times every year for checkups and maybe a prescription for the annual bout of the crud. You can afford to have a very high deductible because it’s unlikely you’ll ever visit the doctor enough times in a year for the insurance company to take over your payments—but it’s still a good idea to have insurance in case of something serious or an accident.
Now if you are older and have needs that require you to see the doctor multiple times a year, especially if testing is routine, you may find that a plan with a lower Deductible and Maximum Out of Pocket to be to your advantage
You will pay a higher monthly premium in exchange for a much lower deductible but the thought here is you anticipate you’ll have medical expenses, that lower deductible means you’ll pay much less out of pocket, even though your premiums are a little higher every month. Think of deductibles and premiums like a see-saw: the more one goes up, the more the other number goes down.
There’s no such thing as the perfect insurance policy for everyone—only the perfect policy for you. It’s important to take into account your health, income, age of your possessions, dangers associated with your job and other factors when deciding how to arrange your coverage.
Call Adkins Insurance Agency today at (417) 883-4343 for more information. We’ll work hard to get you all the coverage you need and help ensure you are spending your insurance dollars wisely.