What Is A Deductible?

"Why is there a bill for my visit? It's supposed to be covered by my insurance."

We hear some version of this every single day at SkyVision. If you have health insurance or vision insurance most of the services provided at SkyVision Centers are, indeed, "covered" by your insurance. If you've been listening to or watching the news at all lately you have probably heard a lot of mentions of something called a "deductible". It's your deductible that is often the cause of you receiving a bill for your visit, even for a covered service.

So just what is a deductible, anyway? Modern health insurance is very complex, but the concept of a deductible in health insurance is the same as it is in any other kind of insurance. Have you read your car insurance policy or homeowner's policy? They almost certainly have a deductible, too. A deductible is an amount of money that YOU have to pay for your health care, or to have your car fixed, or to repair damage to your basement from a flood BEFORE your insurance pays for anything.

Let's cover some basics. A "covered service" is something that your insurance company has agreed they will pay for AFTER YOUR DEDUCTIBLE IS MET. If your car is in $2500 accident and you have a $500 deductible, your insurance will pay $2000 of the $2500 that it takes to fix your car. Once you have paid $500 your deductible has been "met", which simply means that you have paid the amount of money that YOU are responsible for.

The same exact thing goes in health care. Starting usually on January 1st every year your deductible re-sets. If you have a $500 deductible the first $500 of covered services you receive will not be paid for by your insurance; you must pay the first $500, and after that your insurance will pay for your health care. Some insurance policies have very high deductibles, sometimes in the thousands of dollars. This usually means a lower monthly premium or payment for your insurance, but it also means that you must pay a bigger part of your bills out of your own pocket before your insurance starts to make payments.

In other words, there's a trade-off: lower monthly fees in return for a higher deductible, the amount of money you must pay FIRST before your insurance starts to pay for covered services.

Whether you buy your own health insurance, have Medicare, or receive insurance as a benefit from your job, you should always educate yourself about how your specific policy works. One part of this is to learn what your deductible is so that you can plan for that when you get a bill from a doctor or a hospital for medical care.