Deductible Defined

• A health insurance annual deductible is a specific dollar amount that must be paid by the patient before the carrier will contribute anything towards the cost of care. Annual deductibles usually only apply to actual medical services rendered, not standard office visits or checkups. When treatment is provided, the patient is responsible for paying the first portion of the invoice, and the remaining balance is forwarded to the insurance company for processing.
  
  

Purpose of Deductibles

• Health insurance annual deductibles reduce the monthly premium for policies while still ensuring that medical providers receive the bulk of their service fees from the carriers. Insurance policy premiums directly reflect the carrier’s financial liability and exposure. By requiring patients to take on more of the monetary responsibility for their treatment, insurance companies have a predictably smaller obligation, which subsequently reduces prices for consumers.
  
  

Advantages for Carriers

• Deductibles provide advantages to health insurance carriers besides an obvious reduction in the outflow of cash. Consumers who are responsible for a larger portion of their medical expenses will more carefully consider visits to physicians and specialists. Annual deductibles reduce the number of hours physicians spend with patients who have no legitimate medical complaint, a situation that results in claims and invoices the carriers must still pay. Fewer wasted office hours leave doctors more time to treat people with serious medical issues.
  
  

Advantages for Consumers

• Annual deductibles create lower monthly health insurance premiums, making high quality policies easier for consumers to afford. Generally healthy patients who do not need recurring or complex medical procedures benefit from the reduced cost of medical policies with deductibles. Health insurance products with deductibles are still legitimate policies that offer access to the same network of physicians and facilities utilized by members of non-deductible medical insurance plans.
  
  

Dangers for Consumers

• Unfortunately, health insurance policies with annual deductibles are not without certain risks. Consumers insured under these types of policies may find themselves owing substantial sums to hospitals or other medical facilities after services are provided. Additionally, some insurance carriers insist that the member’s deductible be satisfied before they submit their own portion of the invoice.