What Are Insurance Deductibles?

May 5, 2022

Dr. Jerry Williams of Urgent Care 24/7 discusses a medical health insurance topic that is frequently poorly understood in our urgent care centers nationally; insurance deductibles.

Many people don't understand what their deductible is, and there's a lot of confusion between insurance deductibles, which was what this talk is about, and copays. Let's explain what an insurance deductible is. An insurance deductible is the amount of money that you have to pay out of pocket before your insurance benefits start paying towards your medical care. So frequently, we'll have patients come into Urgent Care 247, because we don't accept health insurance of any kind. We think that health insurance and primary care and in urgent care is completely unnecessary cost. So we're able to eliminate that cost by eliminating health insurance for primary care and urgent care, and can pass that savings on to our patients.

Frequently patients will come in and they say "oh, but I have insurance that I have a $75 Urgent Care copay". Then we ask them, "Have you met your annual deductible yet?" They don't know what that is, so they don't understand that. Even though they have a copay for urgent care, they're very likely going to get a bill in four to six weeks after their insurance has been billed, where the insurance will then tell the provider, this person hasn't met their annual deductible deductible amount yet, which is the out of pocket expense, and then you're going to get a bill for the remainder of the visit.

Now, deductibles are per patient. So if you're a family of four, you may have to have a $4,000, $5,000, $7,000 up to $10,000 per person deductible. Now, what that means then, though, there are some caps that they'll put on family deductibles, depending on the policy, but typically, family policies are husband and wife policies have a they will have a per person deductible. So you have to pay, if your deductible is $5,000, you have to come out of pocket $5,000 per person for your care, before your insurance is gonna pay a penny.

The copay is kind of a participation or a utilization fee, where when you go to the doctor's office, or you go to the urgent care center, or you go to the emergency room, you have to pay a copay for utilization of that service. That is very different than a deductible because the deductible is your total out of pocket expense that you have to pay per year before your insurance starts paying any benefit. An interesting thing too is frequently we'll see patients who will help meet their deductible in December of the year. Keep in mind when your policy renews typically on January one, your deductible renews as well. So you have to start all over again.

In fact, the insurance companies use actuarial tables to figure this out, because they're doing riding insurance on on huge, huge numbers of pop patients, large populations. So it's really a statistics. It's a math problem to the insurance companies. They do the math very, very well. In fact, they do the math so well, that about 80% of all patients never meet their deductible. Think about that 80% of us who have insurance, pay for insurance 12 months out of the year, that we never meet that out of pocket deductible. So the insurance company never has to pay a dime for coverage.

Now there's other 20% those those patients do meet their deductible, therefore, they'll get some benefit paid out from their insurance, their health insurance. So if you're starting to figure out that all this money that you're paying out for health insurance is is kind of a scam. It's because it is. So big business has got it figured out and they're going to do a hedge. That's what that's what health insurance is that you're hedging your bets against. In case you have a catastrophic illness or life threatening illness, where you would have a very, very high medical expense that would bankrupt you. The number one cause of bankruptcies in America is medical cost healthcare costs. So you have health insurance, to hedge your bet against this health crisis that could could leave you inside Or would eat up your your net worth or a large part of it. Now, it's really important to understand though, that when it comes to health insurance and it comes to deductibles, you really need to have health insurance in place.

The problem is, is we got away from major medical, and we went to a health insurance that we expect to cover everything like even the minor things like urgent care and primary care and flu shots.

Keep in mind, your annual deductible is an extremely important part of the equation for your health insurance. Dr. Williams hopes that's useful to you. He hopes you can put that information that knowledge to use when it comes time to renew your health plan next year, and you can save yourself some money and find the plan that's best for you and your family.