Deductibles in health insurance are a set amount you’ll have to pay for healthcare annually before your insurer begins paying for your healthcare expenses. Once you’ve paid off your deductible, you only pay the copayment or coinsurance for the covered services, and the insurer will take care of the rest.
This Pacific Prime CXA article will discuss deductibles, along with how it works, and a rough scenario example for better understanding.
What are Deductibles?
Deductibles are a set amount the insured must pay for their covered healthcare services annually before their selected insurer starts taking care of their healthcare expenses, serving as a cost-sharing practice between the insured and their insurers.
Once the insured has met the required deductible amount, they’ll only have to pay the copayment for their covered healthcare services, and then their selected insurer will handle the rest. While commonly seen in health insurance plans, other types of insurance plans like homeowner or auto insurance also feature deductibles.
Should I Get a Deductible or Not?
Whether or not you need to get a deductible depends on your general health and wellbeing.
For instance, having a deductible is strongly recommended if you are healthy and not in need of any urgent or major medical care. On the other hand, no-deductible plans are recommended if you have chronic health conditions requiring regular medical attention.
In the case of the latter, no-deductible plans will forgo deductibles in favor of paying for the healthcare expenses right away to reduce out-of-pocket expenses and ensure the patient gets the medical attention they need.
Deductible Exemptions
The main healthcare service exempted from deductible payment is preventative care, completely covered by most health insurance plans provided the insured selects hospitals within the insurer’s network of healthcare providers.
This means your health insurance plan will completely pay for all annual physical care and immunizations, such as vaccinations, as well as routine tests and screenings, even if you haven’t met your deductible requirement.
Certain health insurance plans may also exempt additional services, such as prescription medication or doctor visits, from deductible payment, while some may have a separate prescription or pharmacy deductible. In that case, you would pay out-of-pocket until you reach the required amount and then your selected insurer will handle the rest.
Differences Between Deductibles and Copayment
Deductibles and copayment go hand in hand together and are often confused by many. Deductibles are set amounts you need to pay for healthcare benefits before your health insurance plan handles the rest for you.
On the other hand, a copayment (also known as co-pay) is a fee you pay upon receiving your healthcare services, such as visiting a doctor or picking up prescribed medication. Hence its name, your selected insurer will pay part of this cost in tandem with you handling the rest.
Deductible Scenario Example
To help you better understand how deductibles work, we will now be giving a scenario example so you can better grasp key concepts on the payment process and coverage.
Let’s say you’ve signed up for a health insurance plan through an employee benefits package and your selected plan has a USD $1,000 deductible. Assuming you have to visit a doctor, and you pay your deductibles, you will have to progressively pay out of pocket until you reach the $1,000 deductible requirement as per your health insurance plan.
If your health insurance plan exempts preventative care such as vaccinations or screenings and immunizations, your health insurance plan will completely cover those healthcare services provided you visit the hospital that is part of the insurer’s network of healthcare providers.
Once you’ve reached your required deductible amount of $1,000, your health insurance plan will then cover all your healthcare services while you keep paying your co-payment in tandem with the insurer.
Conclusion
In conclusion, deductibles are essentially little steppingstones in which you will have to pay for your healthcare services progressively until you reach the required amount as specified by your selected health insurance plan. Once you have reached your deductible amount, you will then only have to pay copayment fees in tandem with the insurer, as the latter will then handle your healthcare service payment for you.
Whether you require a deductible plan or not will also depend on your health and wellbeing. For instance, deductible plans would be great for those not in need of regular, urgent medical treatment, while no-deductible plans would be suitable for those in need of regular preventative care.
Having the right health insurance plan can help save you money in the face of unexpected medical emergencies such as illnesses and injuries, which can be incredibly problematic abroad due to fluctuating medical costs for expats.
While plan selections may be difficult, it doesn’t always have to be a headache, and we’re here to help you. As an experienced health insurance broker, Pacific Prime CXA can help expats seek out suitable health insurance plans that match their budget and healthcare needs.
Whether you’re a local Singaporean citizen or an expat, we will be more than happy to help you with completely impartial advice at no additional cost. And if you have any further questions, please don’t hesitate to get in touch with us. Or, if you would like to compare plans, feel free to get a free quote with us.
He graduated with a Bachelor’s Degree in Communication Arts, Media & Communication major (concentration: Creative Content) from Mahidol University International College (MUIC). During the compulsory major elective period in the summer of 2021 and voluntarily during the summer of 2022, he also interned as a video and photo editor at Mbrella Films.
He has experience working as an English Content Writer at a real estate buying/renting/selling platform in Thonglor. There, he crafted company blog posts on a multitude of topics. Topics include market trends, legal issues and disputes in property businesses, financial guides, expat guides, home insurance, home decoration and maintenance, and weekly real estate news quick-recaps. Occasionally, as part of the blog-writing process, he would also translate existing Thai blogs to English.
In his free time, Guy enjoys doing scriptwriting and storytelling for comic strips, watching movies, and listening to music (particularly film scores).