How Do Deductibles Work in a Global Health Insurance Policy?
When you purchase a international health insurance plan, you may have the option of choosing a deductible amount. We are often asked: How do deductibles work? If, for example, you choose a deductible of $250, you’ll need to pay the first $250 of a covered claim(s) in any period of cover directly to your hospital, clinic or doctor at the time of treatment. So if your treatment costs are $500, you’ll need to pay $250, and your provider will pay the remaining $250 of covered costs. If a deductible is chosen, you would only have to pay this once during any period of cover regardless of the number of claims.
What Is Cost Share and Out of Pocket (OOP) Maximum?
Cost share (also known as the co-insurance or co-pay) is the percentage of every claim you will pay. Out of pocket maximum is the maximum amount you would have to pay in cost share per policy period. An Example :
- You have a claim value of $20,000
- You have a $500 deductible on your policy
- You have a 20% cost share with a $5,000 out of pocket maximum
You would pay $4,400 and the insurance plan would pay $15,600. Typically, once the deductible and co-pay/cost share is met, the insurance plan covers 100% of all future costs. Here is an infographic that illustrates the examples above.
How Do Deductibles Affect my Insurance Premiums?
There are a variety of factors that will affect the cost of your insurance plan, including your age, where you are from and where you are living, and the deductible or cost-share amount you choose to include in your policy. A higher deductible or cost-share will lower your premium. As you agree to pay more out of your pocket for potential medical expenses, the cost to the insurer is reduced and they share some of that benefit with you when you purchase the plan. However, it is not a dollar for dollar reduction and each insurer will handle deductibles and premiums differently. Often customers are surprised to find that if they choose a $1,000 deductible their premiums are only reduced by a percentage of that amount – often much less than expected. The insurer continues to maintain a high level of risk when you purchase a policy and a $1,000 deductible is only a small portion of that total risk so they do not deduct that full amount from your premium.
What Is Deductible Carry Forward?
Some plans provide a benefit called Deductible Carry Forward or CarryOver. This allows the client who purchases the coverage to receive credit for expenses paid at the end of their policy period toward expenses incurred at the beginning of their new policy period. As described in the policy certificate for the IMG Global Medical Plan: “If the Deductible has not been met during the Period of Coverage, then Expenses incurred during the last 30 days of the Period of Coverage will be applied toward satisfaction of the Deductible for the next Period of Coverage.”