The word deductible is one that most of us will encounter relative to our health insurance. As we preach continually in this column, you will be able to maximize your benefits, minimize your out of pocket expenses, and reduce your frustration level if you understand how your insurance works. Simply stated, a deductible is the amount of money you must pay out of your pocket first, before benefits are payable.
An important point to keep in mind: just because a charge went towards your deductible does not mean it was not covered! Frequently people will call our office stating that a medical charge was not covered when it was actually applied to the deductible. A charge not being covered is very very different than from being applied to your deductible. Do not confuse the two issues.
Back in the good old days when we all had traditional comprehensive health insurance plans, we had a deductible which had to be satisfied before any benefits were payable. Now with managed care plans this is not always the case. Some plans now offer benefits before the deductible is satisfied. If you have a benefit that is paid with no deductible, that benefit does not get applied to your deductible.
We have been receiving numerous phone calls from people who ask if their $20 co-payment for in-network services will be applied to the deductible for their out of network benefits. The answer is no. Likewise, many of you have policies that will pay up to $300 a year, with no deductible for a routine physical. That $300 that is paid for your routine physical does not also get applied to the deductible. Some plans have separate deductibles for prescription benefits and for other medical benefits. It is a good idea to know what the dollar amount of your deductible is, as well as what services you may have performed without satisfying a deductible, or what services will go towards your deductible.
Last week one of my group health insurance clients called me, quite upset, because she stepped on a rusty nail. She went to the doctor’s office, which was covered at 90 per cent with no deductible. But, the doctor sent her to the emergency room for the tetanus shot. When I heard this I just groaned. Her policy, like most policies, has a deductible for any services rendered in the hospital. That tetanus shot ended up costing her $350. There was the charge for the use of the emergency room, a charge for the injection, a charge for the emergency room physicians. She really didn’t have much choice other than to find another doctor. Had I been that patient, I would have explained to the doctor the reason why I did not want to go to the emergency room. I would then find another doctor who stocks tetanus serum in his/her office.
You should also know if your deductible is per illness, per calendar year or per contract year. If your deductible is per illness, this means you must meet a separate deductible for each diagnosis. (Bronchitis would be one deductible, a broken arm another, etc.) In our office, we see only a few policies a year with a deductible per illness. For the most part, you can no longer purchase policies like this in New Jersey.
If you do not know what your deductible is look at your ID card. In all probability, your annual deductible per person and per family is indicated on the card. If not, contact your insurance agent or your employee benefits department if you have your insurance through your employment. If you still have questions, this office will be happy to answer them for you.
In some cases, the deductible may be per contract year. This means if your employer bought group health insurance in August, it is possible that your deductible could run from August 1 through July 31 of the following year. Although this is possible, it is not likely anymore. Ninety five percent of the policies that we deal with in our office have deductibles per calendar year.
For those of you on Medicare, you have two deductibles: if you are admitted to the hospital in 2003, you have a deductible of $840. Unfortunately, this $840 deductible is not per calendar year, it is per benefit period. This means when you are discharged from the hospital if you remain out of the hospital for more than 60 days, you must meet the $840 deductible all over again. Keep in mind that this deductible only pertains to hospital admissions when you are admitted to the hospital and you spend a minimum of 24 hours in the facility. It does not apply to any services rendered to you as an outpatient such as radiation treatment or same day surgery.
Part B Medicare covers your Medicare expenses and it has a $100 deductible per calendar year. Many seniors like to write out a check for $100 to cover that $100 Part B deductible and give it to their doctor on their first office visit of the New Year. Please don’t do this! “The system” simply does not work that way. Your deductible is based on the amount that Medicare approves and you must wait to see how Medicare processes the claim. If your office visit is $100, for example, and Medicare approves (or allows) $85.00, you will owe the doctor $85 and your Medicare Summary Notice will tell you that $85 was applied to the deductible. Many Medicare supplements will pay this deductible. If your policy does not pay the deductible then you are responsible for paying the doctor the $85 approved amount. If your doctor does not accept assignment, you will owe the doctor $100.
With all good wishes for a healthy, happy New Year.
Irene Card & Betsy Chandler share the responsibilities of running Medical Insurance
Claims, Inc. a health insurance services company. If you have questions relative to this
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