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Congratulations, college graduate! You’ve earned your degree and accepted your diploma. Now it’s on to the next thing, whatever that might be. If someone asked you to list the key concerns occupying your mind right now, you might include looking for work, finding a place to live, and figuring out a way to pay off your student loans as soon as possible. Don’t forget about securing health insurance coverage.
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Welcome to Health Insurance Deductible 101. It’s time to get to know one of your health plan’s key components and better understand how health insurance works.
If you have an Obamacare plan, you have a deductible. If you are among the 20 million people who have gained health insurance coverage because of the Affordable Care Act, the concept of a deductible might be new to you. Even if you’ve had health insurance before, you may be a little uncertain about deductible basics—a lot of us are murky on the topic.
In a 2015 survey of young adults aged 19 through 30, half of the participants couldn’t define “deductible.” Another survey found that nearly a quarter of individuals newly enrolled in health insurance plans didn’t understand what the term “deductible” meant—close to half of those who did not enroll didn’t understand it.
Let’s start with a basic definition. A health insurance deductible is the dollar amount that an insured individual or family must pay for covered healthcare services each year before their plan benefits fully take effect.
You pay out of pocket for covered healthcare services until you reach your plan deductible.
Here’s an example:
Sam buys a bronze plan. The plan details list the individual, in-network provider deductible as $5,500.
Sam feels ill. She goes to her primary care doctor for a visit, presents an insurance card and pays her plan’s office visit copay.
This was Sam’s first time using her health insurance this year. As such, she has not yet paid anything toward her deductible and her coinsurance has not yet kicked in. She receives a bill of $150 for the visit.
After Sam pays her $150 bill, her remaining deductible amount is $5,350.
Let’s say Sam continues to receive medical care throughout the year and pays her deductible down to a zero balance. She gets a rash and goes to the doctor to have it checked out. The total charges for the visit and allergy testing are $300.
Þ The coinsurance amount in Sam’s health plan once she reaches her deductible is 0 percent.
Þ That means she owes nothing for the care received.
Þ The $300 balance is covered by her health insurance benefits.
Some plans may cover certain services before you reach your deductible. Read your policy information for specifics and/or contact your health insurance provider with questions about your benefits.
Whereas a deductible is the amount you pay for healthcare before your plan benefits take effect, a copayment (i.e., copay) is a flat fee you may have to pay at the time you receive healthcare. Your plan may have an office visit copay and a separate, urgent care copay, among others. Finally, coinsurance is the percentage of covered healthcare costs you pay after your deductible has been met.
These are basic definitions. You can read more in our article “What is the Difference Between Coinsurance, Copay and Deductible?” And, as always, consult your health insurance policy or contact your health insurance company regarding your plan benefits.
Yes. You will have an:
Your plan may also have a separate prescription drug deductible.
Each year, the Internal Revenue sets guidelines for what is considered a high deductible health insurance plan.
For calendar year 2016, the IRS defines a high deductible plan as one with an annual deductible of no less than:
Furthermore, the plans’ annual out-of-pocket expenses cannot exceed the following amounts:
In 2017, the IRS has announced that these guidelines will remain the same.
It may seem counterintuitive, but buying additional insurance coverage could help if you have a high deductible health insurance plan. Supplemental health plans can help reduce your out-of-pocket healthcare expenses.
Medical gap plans pay a lump sum benefit when a covered accident or illness occurs, and you can use the payment toward your Obamacare deductible, household expenses, childcare and more.
Telemedicine can help reduce the cost of care when you need to see a doctor and can also save you the time of traveling to and waiting at a clinic. The Telemedicine bundle available through healthedeals.com allows you to receive telehealth consultations for minor ailments such as a cold, sinus infections, allergies, pink eye and more—just $15 per consultation.
In general, the lower a health insurance plan’s monthly premium is, the higher its deductible is—and vice versa. It can be tempting to focus on premium, but it is important to consider your potential out-of-pocket responsibility if you need medical care.
The next time you shop for health insurance, be sure to look for coverage that strikes a balance between a premium you can afford and out-of-pocket costs that you can pay. Consider how much healthcare you need in a typical year and if you had a large claim whether or not you could pay out of pocket until your benefits took effect.
Working with a health insurance producer can help you find the right Obamacare plan and supplemental coverage for your budget and health. Call the number at the top of your screen to speak with a certified advisor who can answer your questions and assist you.
 U.S. Department of Health and Human Services. “20 Million People Have Gained Health Insurance Coverage Because of the Affordable Care Act, New Estimates Show [Press Release].” March 3, 2016. http://www.hhs.gov/about/news/2016/03/03/20-million-people-have-gained-health-insurance-coverage-because-affordable-care-act-new-estimates
 Singh, Maanvi. “Defeat By Deductible: Millennials Aren’t Hip to Health Insurance Lingo.” NPR Morning Edition. June 16, 2015. http://www.npr.org/sections/health-shots/2015/06/16/414665468/defeat-by-deductible-millennials-arent-hip-to-health-insurance-lingo
 Filipic, Anne. “Silver Plans, Deductibles, and Co-Insurance, Oh My! Why Health Insurance Literacy is Critical for Enrolling and Retaining Millions in Coverage.” Enroll America. Sept. 15, 2014. https://www.enrollamerica.org/blog/2014/09/health-insurance-literacy-critical-enrollment-retention/
 Centers for Medicare and Medicaid Services. “Glossary of Health Coverage and Medical Terms.” Accessed May 11, 2016. https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/UG-Glossary-508-MM.pdf
 Example based on HealthCare.gov Bronze plans available to a 28-year-old woman in Ohio. Rates access on May 13, 2016. https://www.healthcare.gov/see-plans/#/plan/results/33931OH0030009/details
 Cook, Dan. “2017 HSA Limits Released.” BenefitsPRO. April 29, 2016. http://www.benefitspro.com/2016/04/29/2017-hsa-limits-released?slreturn=1462294917
METAL GAP and METAL GAP 2
THIS PLAN IS NOT CONSIDERED TO BE MINIMAL ESSENTIAL COVERAGE AS DEFINED BY THE PATIENT PROTECTION AND AFFORDABLE CARE ACT (ACA). ENROLLING IN AND MAINTAINING THIS PLAN WILL NOT EXEMPT YOU FROM THE SHARED RESPONSIBILITY PAYMENT (TAX) THAT MAY APPLY IF YOU DO NOT HAVE PLAN WITH ACA-COMPLIANT COVERAGE.
The Telemedicine plan is NOT insurance. The plan is not insurance coverage and does not meet the minimum creditable coverage requirements under the Affordable Care Act.
About The IHC Group
Independence Holding Company (NYSE: IHC) is a holding company that is principally engaged in underwriting, administering and/or distributing group and individual disability, specialty and supplemental health, pet, and life insurance through its subsidiaries since 1980. The IHC Group (including through its 92% ownership of American Independence Corp. (NASDAQ: AMIC)) owns three insurance companies (Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company), a majority of Ebix Health Administration Exchange, Inc., a fully insured third party administrator, and IHC Specialty Benefits, Inc., which is a technology-driven insurance sales and marketing company that creates value for insurance producers, carriers and consumers (both individuals and small businesses) through a suite of proprietary tools and products (including ACA plans and small group medical stop-loss). All products are placed with highly rated carriers.
About IHC Specialty Benefits, Inc.
IHC Specialty Benefits, Inc., doing business as Health eDeals Insurance Solutions is a full-service marketing and distribution company that focuses on small employer, individual and consumer products. Health eDeals markets products via general agents online, telebrokerage, advisor centers, private label and directly to consumers. For more information about Health eDeals visit http://www.HealtheDeals.com.
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