More and more people are opting to go with deductible health insurance plans in order to save on healthcare costs. However, many have difficulty understanding how deductible medical plans work. Read on to find out why people choose health plans with insurance deductibles, what kind of deductible expenses you'll have with one of these plans, what benefits are subject to the deductible, and how to choose the right deductible plan for you and your family.

What is an insurance deductible?

Many customers are looking to define "deductible". They are searching for the right health plan, and once they find out the health insurance deductible definition, they are able to understand how the plan works and whether or not they want to purchase that plan. See below for the definition of "deductible".

Deductible Definition: The word deductible as it relates to medical insurance is a dollar amount that must be reached before discount prices on healthcare are made available. Deductible Plans usually have three stages:

• Stage 1: Before Reaching the Deductible
  At this point you pay full price for most or all healthcare expenses at the point of service. Some benefits may not be subject to the deductible; in this case, you pay coinsurance or copayments for these exempted services.
• Stage 2: After Reaching the Deductible
  At this point, you receive discount rates on all covered benefits. You pay coinsurance or copayments for healthcare services.
• Stage 3: After Reaching the Out-of-Pocket Maximum
  At this point you receive free coverage on all covered benefits at the point of service until the end of the year. At the end of year, the deductible and out-of-pocket maximum reset and you return to Stage 1.

Deductible Medical Expenses

Some people choose no deductible health insurance in order to have low cost health care expenses at the point of service, but many find that the monthly health insurance premiums on a deductible plan make medical insurance coverage far more affordable. Health insurance deductibles usually range from $500 up to $10,000. Even low deductible health insurance plans like a $500 Deductible Plan offer some savings, but you'll tend to significantly decrease your costs by getting a plan with a $1500 deductible or higher. One of the best ways to save money on medical deductible plans is to go with HMO coverage, but you will still be able to save some money by choosing a PPO deductible plan.

When is my deductible waived?

Some plans with health deductibles allow waiving the deductibles for some benefits. For instance, on Kaiser Permanente's popular $30/$1500 Deductible plan, you may waive the deductible for doctor visits and prescription drugs. These benefits are covered before reaching the deductible with a copayment. Deductible Copay Plans have some benefits which are not subject to the deductible such as physician visits and RX coverage as mentioned above. When receiving these services, you simply pay a copayment, which is a lower amount than the full cost of the service provided. Usually, these copayments are not counted toward the deductible.

What happens after I reach the healthcare deductible?

Once the health deductible is reached, you only pay coinsurance and copayments until you reach your out-of-pocket maximum. The coinsurance after deductible that you pay varies by plan and carrier, but often ranges from 10% to 30%. Usually, you will pay coinsurance on expensive healthcare services such as hospitalization and surgery. Often, you will pay copays (deductible plan copays also vary by carrier and by plan) for lower cost services such as doctor visits and prescription drugs. Copayments for doctor visits usually range from $5 to $50. Copays for medications tend to range from $5 to $15 for generic drugs and from $15 to $40 for brand name prescription drugs. At this point, the insured have reached their medical deductibles and all their copayment and coinsurance payments are adding up toward the deductible policy out of pocket maximum. Once you reach the limit for your out of pocket, deductible payments and post deductible medical expenses cease. The monthly premiums for your deductible coverage will continue, but beyond that you will have 100% coverage for all your point of service expenses for benefits that are covered on these deductible plans.

Insurance Premiums on Deductible Plans

Learning to find the right deductible in health insurance is one of the best ways to zero in on the right balance of coverage and cost. The #1 reason people switch over to deductible health insurance plans is to lower their insurance premiums. Deductible premiums tend to be much lower than premiums for no deductible health insurance plans. The rates for medical coverage are dependent on several factors including age, residential location, and type of coverage. Monthly premiums differ on individual and group plans. Regarding business coverage, the larger the group the more discounts you qualify for. On individual plans, you may have the option of applying separately or as a family. You can get online quotes to compare monthly premiums. Deductible plans usually offer the most affordable health insurance coverage.