Understanding Deductibles - PPO Insurance and PPO Plans

To Assist you with Comparing Apples to Apples with different health plans, there is the question that so many people don't know to ask, but it is so important to understand, and the question is:

What happens before the deductible is met?

What happens before the deductible is met is where you could end up spending more or less money out of your pocket. For example, if you have a $5,000 expense from an Emergency Room, and you have a $5,000 deductible, and you haven't yet "met your deductible" (the money you pay out of your pocket before the insurance company begins to split the bill with you), how much would you expect to pay? Is the insurance company going to share with you a negotiated rate? If they do, get specific, how much of a discounted rate? Dig deeper, get your straight forward answer. Is it a percentage? Is it a range?

For Example:

* Scenario 1 - $5,000 Emergency Kidney Stones, Deductible $5000, your out of pocket $2,000

* Scenario 2 - $5,000 Emergency Kidney Stones, Deductible $5000, your out of pocket $5,000

With Health Insurance, a Deductible (the first stage) is the amount of money that you pay out of your pocket before you move into the 2nd stage. So in the first stage, pay attention to the details of how much you'll pay for small procedures if you only pay parts of your deductible in a year, but not the entire deductible.

Now if have met your Deductible, you'll move into the"Co-Insurance" stage. In this 2nd Co-Insurance stage, you and your insurance company will 'co-insure" meaning, you and your insurance company will share the burden of the bill. You will generally pay the lesser percentage, and the insurance company will pay the larger portion.

Then the 3rd and final stage of insurance is "Maximum Out Of Pocket." This is the most you'll have to pay in a calendar year.

Deductibles usually range from $500 - $10,000 in private insurance ppo plans. The higher the deductible, the lower the premium, and conversely the higher the premium, the lower the Deductible.

The rationale behind this is that if the Insured person is willing to pay a little more each month in their premium, the ppo insurance company can reduce their deductible, but if the client would prefer to have a low premium and take on a little higher risk with total money out of pocket, they exchange that risk for a lower premium.

Another thought, always ask how many deductibles you must meet each year. This can vastly change within company's and plans. And it can vastly differ for individuals and family ppo plans.

Last thought on deductibles, if you have a health plan with co-pays, generally you'll pay a "Co-Pay" at the Dr's office, without having to worry about a deductible, however, you MUST ask questions when shopping for health coverage. Some "co-pays" are after the deductible has been met. For example, if your plan says an Emergency Room copay of $100, is this before or after the deductible?