Insurance Deductibles Definition
May 31st, 2010Question: What is an Annual Insurance Deductible?
I’m looking at health care plans.
One says, “Annual Deductible of $7,500. You pay $53.16 a month.”
I read the definition of an insurance deductible and it said, “Your deductible is a predetermined fee that you’ll be required to pay before your health insurance carrier will be responsible for paying your benefits.”
Does this mean I have to pay $7,500 before the health insurance kicks in?
Or am I just misunderstanding all of this?
Answer: You pay $53.16 per month ($638 per year, which is actually very low), whether you receive any medical care or not. You also pay the first $7500 of medical bills each year. The health insurance pays the rest. For example, if your medical bills for the year are $10,000, then you pay the $53.16 per month plus the first $7500 of medical bills and the insurance pays the last $2500.
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