What does deductible mean?
Your deductible is determined by the plan your employer selects. The deductible is the amount that you pay for services before the insurance company pays the coinsurance. For example, if you have a $1,000 deductible and you have outpatient surgery conducted. The allowable amount (that is, the amount that the provider and the insurance company have negotiated) is $4,000. You will pay the first $1,000 (your deductible) leaving $3,000. The insurance company will then pay their portion of the coinsurance (90%, 80%, 70%, 60%, 50%, etc.). In this instance, let’s assume the coinsurance is 80%, so the insurance company will pay 80% of the $3,000 which equals $2,400. You will pay the 20% coinsurance (80% + 20% = 100%) which equals $600.
The deductible is the amount that you as an “insured” must pay before the insurance company will begin reimbursing you for eligible expenses. In a true indemnity plan, a deductible must be met before reimbursement for any covered expenses begins. The amount of a deductible may range anywhere from $100-$500. Sometimes they’re even higher. Once you’ve paid the deductible, then the insurance company will begin to reimburse you for eligible expenses. The amount the insurance company reimburses you depends on a few things: The coinsurance your policy states you are responsible for. The amount your doctor or the provider of service you went to is billing. The usual, customary and reasonable amount that the insurance company will consider eligible for reimbursement.
