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Covered California Q&A

Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.


Health Insurance Deductible

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Question: I spoke to another angent about getting some insurance. He talked about a deductible and I got so mixed up. What does deductible mean, is it a yearly amount that I to pay? Im a student so I can't afford $5000. Thanks for your help!!!!

Answer: A deductible can range from $250 upwards and is the amount a health insurance company requires that you pay out of pocket towards your health related expenses before they start to contribute. You do not need to pay it each year. It only comes in to play if you have expenses that are subject to your deductible. Oftentimes insurance plans have a co-payment for, for example, doctor visits whereas expenses related to testing, ER visits or hospitalizations are subject to the deductible. In most cases, if you meet your deductible you will then be responsible for a percentage of your expenses thereafter up to a total out of pocket amount. A typical coinsurance would be 80/20 which means that you would be responsible for 20% of your expenses once you have met your deductible. The total out of pocket expense is always capped which means that, even if you had, for example $200, 000 in medical expenses in any one year, you would only be responsible for, say, $5000 during that calendar year. The deductible is based on the calendar year so it renews in January each year. When buying health insurance, the consumer must make a decision around balancing the monthly premium with the deductible. Typically, the lower the deductible the higher the premium.

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