WPS Health Insurance Blog

What’s a deductible?

Posted by Ryan Kanable

May 14, 2013 9:00:00 AM

dictionaryIf you own any kind of insurance–car, home, health–you’ve probably heard the term "deductible." But what does it mean?

In health insurance, a deductible is the amount that you, as a policyholder, must pay toward your medical expenses before your insurance company begins to pay its share. This amount usually restarts each calendar year.

Let’s say you have a health plan with a $1,500 deductible. After a stay at the hospital, you have a medical bill for $30,000. You are responsible for paying the first $1,500 out of pocket. At that point, your health plan begins to pay benefits for the remaining $28,500 according to the terms of the policy.

Here are some quick tips about deductibles:

  • The purpose of a deductible is to help keep premiums low through cost-sharing as well as by reducing the number of small claims and unnecessary doctor visits.
  • Many preventive care services (such as physical exams, well-child visits, OB-GYN visits, etc.) are not subject to a deductible.
  • Generally, plans with higher deductibles have lower premiums. So if you’re in good health, it might make sense to save some money and choose a higher deductible.

For more health insurance tips, information, and money-saving strategies, visit the WPS Learning Center, where you’ll find articles on preventing illnesses, making wise health decisions, and other timely topics. To ask a question or request a quote for a high-quality individual or family health plan from WPS, call 1-800-811-1670 to talk with a friendly representative today.

Topics: health insurance