The IRS Deductions Blog

Posts Tagged ‘insurance deductibles’

Question: 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.

Items on Amazon Right Now for Insurance Deductibles Definition:

Labour and Employment

There may be a rough road ahead for employers that offer medical benefits to employees through self-insured group health plans. Self-insured group health plans are group health plans that do not shift the risk of the cost of medical coverage from the employer to an insurance provider.

Health Reform & Americans with Disabilities (05/20/2010 Web chat)