What if You Don't Meet Your Yearly Deductible in Medical Insurance?
A deductible is the amount a customer must pay towards a claim each year before responsibility falls to the insurer. A customer who does not pay the full deductible during the year does not have to make up the difference and may even be allowed to carry some or all of the payment over as "credit" to the following year.-
Terminology
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There are three types of payment a medical insurance customer typically pays beyond the annual premium. The deductible is the amount towards a claim the customer pays himself each year before the insurer begins to make payments. So, for example, if a customer's total claims for the year were $700 and the deductible was $500, the customer would pay $500 in cash and the insurer would pay the remaining $200. Co-insurance is where, once the deductible has been exceeded, the customer pays a portion of the remaining claims during the year. This usually happens on a policy with lower premiums. A co-payment is a fixed amount the customer pays for each visit to his doctor. This applies regardless of how much the customer has paid towards the deductible.
Financial Consequences
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If a customer does not make claims with a total high enough to reach the deductible limit, he will not have to pay any further money that year. The deductible is a maximum payment, not a minimum.
Carryover
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Some health care policies allow the customer to carry over some payments towards one year's deductible to apply to the following year's deductible. This is usually restricted: for example, it may only apply to payments made by the customer in the final three months of the plan's year (which may not coincide with the calendar year). When this happens, the carried-over payments are counted towards the following year's deductible. For example, if a customer with a $500 deductible pays $200 towards claims in the month before renewal, he would be classed in the following year as having already paid $200. This means he would only have to pay a further $300 towards claims during the year before the insurer started paying.
Indications
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If a policyholder finds she is frequently failing to reach her deductible limit by the end of each year of the policy, it may be a sign the coverage levels are too high. It may be worth considering a policy with lower coverage, which in turn should reduce the deductibles and premiums. Alternatively, the policyholder could see whether the insurer is willing to offer a policy with the same coverage level, but a higher deductible, which should mean lower premiums. Such decisions should not be taken lightly, and policyholders should always consider their financial resources and potential medical risks.
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