How does the deductible on your insurance plan affect you?

Posted on Monday, November 26th, 2007 at 5:37 pm

Almost all health insurance plans have a deductible or co-payments. A deductible is the amount the insured (you) must pay before the insurance company will pay towards your expenses. And a co-payment is the amount that you also must pay out of your own pocket; although a co-payment is typically a per service fee or per doctor office visit. For some plans, you will find that they have both a deductible and a co-payment. Usually with these plans, the deductible is for your larger expenses (i.e. emergency room visits, hospitalizations, diagnostic testing) and co-payments are for smaller expenses (i.e. doctor office visits, prescription drugs, etc.). Most domestic health insurance plans are typically set up in this manner. However, for international students some or most health insurance plans out there have a deductible that applies to the entire plan. In this case, it would apply to doctor visits, prescriptions, tests, hospitalizations, surgery, etc. The insurance company would not start paying towards your expenses until you’ve met the deductible.

So, how does this affect you? Well, let’s say you went to the doctor for a minor sickness (i.e. cold, flu, etc.). When you first purchased your health insurance plan you choose a higher deductible, $2,500, to offset the premium cost each month. If your plan only has a deductible and is not a co-pay type plan then you would pay the full amount of your visit out of your own pocket. You would need to pay the first $2,500 worth of eligible expenses in order for the insurance company to start paying towards it. On the other hand, let’s say you got injured and you needed to go to the emergency room. After all of your tests, MRI’s and doctor consultations your bill totaled $10,000 (assuming all are eligible expenses). This means that you will pay the first $2,500 of your $10,000 bill. After that, it depends on the way your health insurance plan is setup and whether or not it has coinsurance. Coinsurance is usually a percentage that you are required to pay after the deductible. Let’s say for example purposes your plan had 80/20 coinsurance up to $5,000 (all eligible expenses) then 100% coinsurance up to the overall limit. After the $2,500 deductible you would be required to pay 20% of the next $5,000 worth of eligible expenses or approximately $1,000. So, your total responsibility would be about $3,500. The insurance company would pay the rest or $6,500. This may or may not be a lot of money for you but for most international students it would be. So, when choosing your deductible it may make sense to choose a lower deductible with slightly higher premium costs each month.

For the plans we offer, the deductible and coinsurance will vary. For international students, the Student Secure Select plan offers 100% coinsurance for eligible expenses after the deductible if you go within the PPO or to the student health center. The Student Secure Budget plan offers 80/20 for eligible expenses after the deductible up to $5,000 then 100% up to the overall policy maximum. The deductible for this plan is $100 per injury or illness or it’s reduced to $50 if you go to the Student Health Center. This plan reduces a lot of your out-of-pocket expenses and provides coverage for doctor office visits, prescription drugs, maternity, diagnostic testing, x-rays, emergency medical evacuation, repatriation, etc. It will also meet most school’s health insurance requirements. You can check our school database for further information.