Great Lakes Wire

Many Americans find themselves struggling to understand basic health care terms, a challenge that can affect both financial and overall health. Citing the National Assessment of Adult Literacy, it is noted that only 12% of Americans possess proficient health literacy skills. The remainder 88% may find themselves at a disadvantage due to this gap in understanding.

When selecting a health insurance plan, factors such as monthly payment were likely considered. Within the plan, numerous insurance terms are used, including 'coinsurance,' 'premium,' and 'copay,' which can often be difficult to grasp. This article aims to clarify one of these terms: deductibles.

A deductible is explained as the amount one must pay out-of-pocket for covered health services before the insurance plan starts covering costs. Insurance providers designate allowable charges that count toward meeting this deductible. Throughout the year, individuals are billed until the deductible is met, after which they pay the coinsurance amount up to their out-of-pocket maximum.

Deductible amounts and out-of-pocket maximums are dependent on individual plans. Plans with higher deductibles usually have lower monthly premiums. However, regardless of the plan chosen, deductibles reset annually.

For users of the Blue Cross Blue Shield of Michigan plan, the deductible and out-of-pocket maximums, along with covered health services, can be viewed using their mobile app. Additionally, a visual infographic is available for those who prefer to learn visually.

To better manage health expenses, individuals are advised to review their deductibles and monthly premiums, which can aid in effective budgeting, evaluating the suitability of current health plans, and achieving financial goals.

More information on small group insurance is offered through SBAM.