Buying Insurance

Lesson 6: Health Insurance

Deductibles and Copayments

Deductibles and copayments refer to that dollar amount of the claim that you must pay. In health insurance, deductibles are calculated per person, per year and cumulatively. Per person means what it says. If mom goes into the hospital in January for surgery, the deductible will apply. If dad goes to the doctor in February for pneumonia, the deductible will apply. If Jr. breaks his arm in March, the deductible will apply. However, most policies will have a cumulative limit on the number of deductibles which can be applied to any one family in any calendar year. Some health insurance policies also have copayments, for instance a copayment of $15 for each office visit. (Buyer beware: avoid those policies which have a copayment of 20% on all covered medical bills. Twenty percent of open heart surgery with complications would be more than most folks could afford). In general, insurance companies do not apply the deductible again to the same person for a previously treated condition providing that not more than six months has elapsed since the last treatment. For tips on calculating your best choice of health insurance deductible see Hungelmann, pp.251-52.

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