Is it possible to get health insurance with no deductible? Yes, a zero-deductible plan means that you don’t have to meet a minimum balance before the health insurance company will contribute to your health care expenses. Zero-deductible plans typically come with higher premiums, whereas high-deductible plans come with lower monthly premiums. No deductible health insurance may appeal to consumers who frequently visit doctors or take several medications.
Health insurance deductibles: what to know
Deductibles can range from hundreds to thousands of dollars, depending on your insurance policy. Whether or not you should choose an insurance plan with no deductible, an insurance plan with a high deductible, or an insurance plan with a moderate deductible depends on your household’s specific healthcare needs and budget.
How do health insurance deductibles work?
Think of a deductible in these terms: First you pay, then they pay. In other words, before your insurance company begins sharing your healthcare costs, you’re required to pay 100% of your medical expenses until your deductible is met. This means that if your insurance plan has a $1,000 deductible, your insurance company won’t help with your healthcare expenses until you have paid $1,000 in medical services.
Why choose a high-deductible health insurance plan over a zero-deductible health insurance plan?
Many people who choose a high-deductible plan do so because it will lower their monthly premium. Also, those who have a high-deductible plan may be eligible for a Health Savings Account (HSA). An HSA allows you and your employer to deposit pre-tax dollars into the account to use for medical expenses.
High-deductible health insurance policies make sense for individuals who are generally healthy and who do not
anticipate getting hurt.
What does no charge after deductible mean?
“No charge after deductible” means that once you have paid your deductible amount for the year, the insurance company will pay 100% of your future, covered medical costs, up to the limit of your policy. You won’t have to pay a copay or coinsurance.
Will my deductible be my only out-of-pocket health insurance expense?
No, your deductible will not be your only out-of-pocket health insurance expense. Most health plans have a deductible, coinsurance, and copays. Coinsurance is the percentage that you pay for a medical service vs. the percentage that your insurance company pays. If your coinsurance is 70/30, this means that you’re responsible for paying 30% of your total medical bill and your insurance company is responsible for the other 70%, after your deductible is met.
A copay is a fixed amount that you pay for certain health services. The amount can vary depending on the services provided and can be required either before or after your annual deductible has been met. For example, let’s say that your copay for a general doctor visit is $20 and the doctor charges $100 for the service. If your insurance policy requires you to meet the deductible before the copay takes effect, you would be responsible for the full $100 at the time of your visit. After meeting your deductible, you would only be responsible for paying your $20 copay at the time of your visit.
Locating health insurance plans with no deductible can be challenging. Fortunately, HealthMarkets can help you find the right coverage. Contact a licensed insurance agent at (800) 360-1402 or apply for a quote online, at no cost to you.
48539-HM-0522
In this article:
- What Is a Health Insurance Deductible?
- What Is Coinsurance?
- What Is a Copay?
- How Do Copays, Deductibles and Coinsurance Work Together?
- The Bottom Line
Whether you get your health insurance through your employer or purchase your own coverage, the cost of premiums isn't the only thing to consider when budgeting for health care costs. Deductibles, coinsurance and copays are three key components of health insurance coverage that help determine how much you'll ultimately pay for medical expenses. To estimate how much your health care will cost, it's important to understand how deductibles, coinsurance and copays work.
What Is a Health Insurance Deductible?
Insurance premiums are what you pay for your health insurance coverage, even if you don't wind up using it. Your deductible is the amount you must pay out of pocket for medical expenses before your insurance begins to share in the cost. (Premiums don't count toward your deductible.) Insurance plans often have one annual deductible for health care and another for prescription medications. Insurance plans with lower premiums tend to have higher deductibles, and vice versa.
If you go to the doctor and haven't yet met your deductible, you may have to pay the full cost of the visit yourself. But don't let fear of a massive medical bill keep you from visiting the doctor: Many insurance plans cover certain services without requiring you to meet a deductible first. (To see services for which the deductible does not apply, read your insurance policy's explanation of benefits.)
Choosing in-network vs. out-of-network health care providers also affects your costs. Most health insurance plans use some type of provider network—an approved list of physicians, hospitals, clinics, pharmacies and other health care providers contracted with or operated by the insurer. Services from in-network (or "preferred") providers are covered; services from out-of-network providers are covered to a lesser degree or not at all. (There are generally exceptions for emergency care.) For example, health maintenance organizations (HMOs) and exclusive provider organizations (EPOs) cover only in-network providers. Preferred provider organizations (PPOs) and point-of-service (POS) plans cover out-of-network providers but pay more if you use in-network providers.
By law, all plans sold through Healthcare.gov or your state's insurance marketplace, and many other plans, must cover the full cost of certain preventive care from in-network providers. In other cases, you may have to pay a copay or coinsurance, but won't have to pay the full cost of medical care.
Insurance plans that cover partial costs of out-of-network care generally have separate deductibles, out-of-pocket maximums, copays and coinsurance rates for out-of-network providers. These may be substantially higher than the costs for in-network care.
Fortunately, there are limits on how much you'll be expected to pay for health care. Most health insurance plans set an out-of-pocket maximum, which is the most you will pay out of pocket for in-network health care in one year (including copays, coinsurance and deductibles). Once you hit that maximum, the insurance covers all your health care costs for the rest of that year. Federal law limits the out-of-pocket maximums insurance companies can set. For 2022, the limits are $8,700 for an individual and $17,400 for a family. For instance, if one family member has $8,700 in out-of-pocket health care costs, that person's health care is fully covered by insurance the rest of the year. Once the total of your family members' out-of-pocket costs hits $17,400, everyone's health care is fully covered for the rest of the year, even if no one individual has spent $8,700 on health care.
What Is Coinsurance?
Coinsurance is the percentage of health care costs you're responsible for paying. In a plan with 20% coinsurance, for example, you are responsible for 20% of the cost of your care, and the insurance company handles the remaining 80%. Insurance plans generally have different coinsurance percentages for in-network vs. out-of-network providers. Low insurance premiums often mean higher coinsurance, and vice versa.
Because most plans require meeting your deductible before coinsurance is used, coinsurance payments generally don't count toward your deductible. (They do count toward your out-of-pocket maximum.) However, some services may be covered by coinsurance without meeting your deductible, and some types of preventive care are covered 100%. If your insurance policy doesn't cover a certain type of care, you'll pay the full amount up to the out-of-pocket maximum.
What Is a Copay?
A copay is a set fee you pay for certain types of health care. For example, if your plan has a $40 copay for visiting your primary care doctor, you pay $40 and the insurance company pays the rest. Some insurance plans may use both coinsurance and copays, depending on the type of service.
Many health care services are covered by copays even if you haven't met your deductible. Some preventive care services have no copay and are covered 100%. Copays count toward your out-of-pocket maximum, but usually don't count toward your deductible; check your plan details to be sure.
Suppose you are single with a health insurance plan that has a $3,700 annual deductible, a $40 copay for a doctor visit, 20% coinsurance and a $6,500 out-of-pocket maximum. You visit the doctor and pay $40 to see them. The doctor says you need surgery; you are hospitalized for three days, and receive a bill for $30,000. How does payment work?
Your copay didn't count toward your deductible, so you must pay the first $3,700 of the bill out of pocket to meet your deductible. Now your coinsurance applies, so you have to pay 20% of the remaining $26,300 up until your total spending reaches the out-of-pocket maximum of $6,500. In this case, you'll pay $2,800 of the remaining bill ($6,500 minus the $3,700 you've already paid). Your insurance pays the rest of the hospital bill. Total cost: $6,500.
After you leave the hospital, you have to fill several prescriptions, which would normally have a copay of $40 each. However, because you've reached your out-of-pocket maximum, your health insurance pays all of your covered health expenses for the rest of the year, so you owe nothing for the medication.
The Bottom Line
Without health insurance, a costly medical crisis could decimate your bank account balance. If you have trouble paying the bill, it could wind up hurting your credit score. To avoid surprises, make sure you understand what your health insurance covers and what your financial responsibilities are.
You may be able to lower your health care costs by using a tax-advantaged savings plan such as a health reimbursement arrangement (HRA), flexible spending account (FSA) or health savings account (HSA) to help pay qualified medical costs. Understanding your health insurance coverage will help you get the most out of it, keeping both you and your finances in good shape.