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What does “no deductible” mean in health support?

A brief overview...

What does “no deductible” mean in health support?

  • Deductibles are consumer expenses that cause insurance payments to begin
  • Deductibles are out-of-pocket expenses
  • Deductibles are not reimbursed
  • Policies with no deductible provide insurance on covered benefits immediately

Deductibles play many roles; the primary purpose is to adjust cost sharing in favor of the insurer and its profit margins. Deductibles are a financial barrier between the consumer and the benefits they bargained for in the insurance contract.

The consumer must pay a monthly premium or other frequency such as semi-annual. The consumer gets no insurance payments from the premiums if there are deductibles in the policy. The consumer must pay the amount of the deductibles before getting any insurance payments on covered benefits.

Comparison shopping can identify the best values in health insurance. It can go beyond premiums and deductibles to find the true costs of insurance. Click here to compare free online health insurance quotes with your zip code!

No Deductible Plans are Rare

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In some markets, no deductible plans may be difficult to find. Among the Obamacare types of plans, platinum and gold plans offer high levels of insurance cost sharing, but they usually come with reachable deductibles rather than zero-deductibles.

A zero-deductible plan may raise premiums significantly and not yield a big advantage over a plan with a small deductible. Some deductibles may be in the hundreds of dollars, and other plans can require more than $10,000.00 per year for family coverage in a low premium policy.

The Appeal of No deductible Policies

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Policies that have no deductible can begin to pay the agreed cost sharing amounts immediately on covered benefits. The appeal is that there are no delays in the cost sharing and that the deductible does not require extensive out-of-pocket spending. No deductible policies can add costs in other areas. Higher costs in no deductible policies include the below-listed items.

  • Premiums are higher on average with no deductible policies. The combination of high premiums and low or no deductible works well for buyers that do not want unexpected costs.
  • Copays are more frequent in no deductible policies. Copays are small payments that do not represent the costs of the benefit or service. They help balance the insurer’s books and the medical provider’s administrative costs.
  • Coinsurance is lower in no deductible policies than standard policies. Higher rates of consumer shares are consistent with plans that allow outside resources. Many lean plans like HMOs and EPOs use no-deductible strategies to drive customers to use network services. They would minimize coinsurance to the extent possible and promote greater customer volume in their narrow networks.

Plan Limits on Expenses

Treatment of outside network coverage is a consistent principle in no deductible policies. The use of outside resources will not move the policyholder towards the expense limit that triggers 10 percent insurance coverage of essential benefits.

Plan limits only apply to network service providers. When spending outside of the network, consumers get little, less, or no cost sharing from their policies.

Zero Deductible versus No Deductible

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There may be no deductible policies that yet require a deductible payment. These occur in some policies that make a separate class of outside network spending. May yes of plans do not cover outside spending at all.

The zero support types include HMO and EPO plans. Other types such as the Preferred Provider Organization or the Point of Service network permit use of outside resources but may require a deductible before beginning to pay the insurance share of the cost sharing for outside services.

  • The Medicare Part A deductible in 2016 was $1288.00.
  • The Medicare Part B deductible in 2016 was $166.00.

The Goal of Insurance-Paid Benefits

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Policies must have limits on deductibles and out-of-pocket expenses. After the deductible, or in no deductible policies, the consumer spending adds up over the course of the insurance cycle. Out-of-pocket expenses are any non-reimbursed expense paid by the policyholder.

The consumer ‘s best outcome is to get to the point where insurance pays 100 percent of the costs of covered benefits. This is the point at which the consumer has paid the maximum it must pay during the annual insurance cycle.

The consumer saves expenses, and the policy works in his or her favor. The policy of the Affordable Care Act favors this result in the face of rising costs and higher deductibles; the upper tier metal plans are most likely to yield to this stage.

Medicare Advantage

Medicare Advantage plans are private insurance policies. The insurers must equal the coverage scope of Original Medicare, but they have flexibility in the ways they can do this. Medicare Advantage plans offer both deductible and non-deductible policies.

Non-deductible policies appeal to many buyers because they do not require consumer payments before getting the agreed costs sharing from the insurance carrier.

As a practical matter, no deductible policies add costs in other areas. They may not charge a deductible but may charge higher copays and higher coinsurance than policies with deductibles.

Original Medicare

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Medicare Part A-Hospital Insurance and Medicare Part B-Medical Insurance from the Original Medicare. They both use deductibles that the Centers for Medicare and Medicaid set for each calendar year. Original Medicare has an annual deductible for each part.

The Medicare deductibles work in an odd way compared to most policies. A large amount of prevention and wellness services do not depend upon the deductibles. Medicare Part B has a relatively low deductible, but it leaves an average of twenty percent of costs for the consumer’s account. These gap charges for Part-B outpatient medical care can add to significant amounts.

Medigap Insurance

Gap insurance is a needed addition o the protection provided by Medicare coverage. Medicare Supplement is a discretionary private program with a guaranteed admission during the initial enrollment period after one has both Medicare Part A and Medicare Part B. Medigap offers a range of plan types and they offer no deductible options with higher premiums than high deductible options with low premiums.

Comparing No Deductible Health Plans

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No deductible health insurance is a variation on the pricing of health insurance. It occurs in Marketplace policies and Medicare Advantage. It provides quick access to insurance cost sharing but usually involves higher costs elsewhere in the insurance cycle. One must also consider the different treatment of expenses paid to out of network providers. This can alter the balance of costs substantially since there may be no limit on expenses paid outside of the plan network.

Comparison shopping can assess the benefits of zero deductible policies on the overall costs of health insurance. Enter your zip code below to compare zero deductible policies and other options for free today!

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