Anyone know anything about Insurance and deductibles?

[GingerSnaps]

I am very confused on how it works and it's not like our country is fluent in the Insurance Industry. :shrug:

$2,000.00 deductible with a 10% out of pocket expense.

vs

$1,000.00 deductible with a 20% out of pocket expense.

This is how I think that it works. You have to spend the initial deductible amount before you can use your insurance and then you pay either the 10 or 20 percent of your bill.

My Professor said that It doesn't work that way. I need to understand this part because it might come up on our final in a few weeks.

[xray s]

1. It is more complicated than that

You also have to consider what the insurance business calls "reasonable and customary fees" and maximum out of pocket caps.

Initially, you pay 100% of your medical bill, up to the annual deductable. Then, you pay your out of pocket percentage of the total bill, IF the charge is "reasonable and customary". If it is NOT, you may be responsible for the difference between what the insurance company is willing to pay and the amount the doctor bills you for, not just the 10% or 20% mnetioned in your plan. If you are in a PPO, the doctor and insurance company have negotiated in advance what they will charge. In that case, you still run the risk your doctor may recommend a procedure not covered by your policy, which you will be 100% responsible for.

Now, your policy probably has an annual maximum out of pocket amount, like $2500 or $5000. That is the most you will pay in a year (unless the other issues I raised above kick in). The maximum usually is not actually a maximum, because they usually cap their lifetime benefit at $1,000,000, at which point you are on your own, until you are destitue and can qualify for Medicaid.

Or move to Canada...which I am seriously considering.