Five Facts about Deductibles

November 20, 2015 Robert Sheen Health Care Coverage, Health Insurance Marketplace

Consumers who shop for coverage at HealthCare. gov have a variety of plans from which to choose, allowing them to find a plan that meets their health needs and budget. The Centers for Medicare & Medicaid Services (CMS) advises those shopping for insurance to consider a number of factors in addition to premiums.

These include the yearly deductible, what services are covered before the deductible is met, whether the consumer’s doctors are in the plan’s network, whether specific prescription drugs are covered, and whether the consumer qualifies for cost-sharing reductions that limit out-of-pocket costs. Factoring in out-of-pocket costs has always been part of buying health insurance. Now the Healthcare.gov website includes a number of resources to help shoppers better understand their choices. These include new features that show consumers their total estimated out-of-pocket costs.

Shoppers can search health plans by their preferred provider, and to see if their prescription drugs are covered.

CMS urged consumers to take an in-depth look at plan deductibles and what they mean for selecting a plan. A health plan’s deductible is the amount the insured owes for covered health care services before the plan begins to pay. Preventive services like cancer screenings, immunizations, and well-child visits are always covered without any additional costs.

Many plans also cover the costs for certain key services before the insured meets his or her deductible, which is unlike what consumers might be accustomed to in the context of an automobile or home insurance. This means that even though a health plan has a deductible, it might not matter for the services the insured uses most frequently, like primary care visits or generic prescription drugs.

According to an analysis of 2015 plan selections, more than 8 in 10 consumers in 2015 selected a plan that covered some popular health services (beyond preventive care) before meeting the deductible. That includes 53% of bronze plan consumers, 88% of silver plan consumers, 93% of gold consumers, and 99% of those who selected a platinum plan.

Here are five things CMS says consumers should know about deductibles in Marketplace plans:

Many other health services are often covered without a deductible.

Services like cancer screening, immunizations, and well-child visits will always be covered without insureds having to pay a deductible, any co-pay, or other costs.

Many other health services are often covered without a deductible.

Many health insurance plans provide some benefits before insured meet the deductible. In those plans, visit to a primary care doctor or a prescription for a generic drug may only require a co-pay – a small fixed amount the insured pays at the time of service. Even specialist visits, mental health outpatient services, and brand name drugs are often covered with no deductible, although insureds will still be responsible for co-payment or co-insurance.

Look to see what a plan covers without a deductible.

Plans differ in what they cover, so when a consumer is looking at a plan on Healthcare.gov, he or she can click on the plan name and look at the “costs for medical care.” This will display information about which services have a deductible and which do not. More details can be seen by clicking on a plan’s “Summary of Benefits and Coverage,” including a detailed explanation of how the plan deductible applies to different services, and examples of certain kinds of care.

Consider services covered without a deductible along with monthly premiums, deductible, and other out of pocket costs when choosing the plan.

CMS notes that it is important for consumers to understand what an insurance company covers without requiring insureds to pay a deductible. This enables shoppers to decide how to trade off monthly premiums, out of pocket costs including the plan’s deductible, and the set of services covered without a deductible. For instance, consumers may want a plan with lower monthly premiums and a higher deductible, or one with a higher monthly premium and a lower deductible.

The Out-of-Pocket Cost feature on Healthcare.gov can be used to estimate what premiums, deductibles and co-pays for the year, based on the number of doctor visits or prescriptions filled, to get a better understanding of total out-of-pocket costs.

Silver plans can save insureds more.

Insureds who qualify for cost-sharing reductions – as most consumers who sign up for Marketplace policies do – can save more. A family of four with income below $60,625 can qualify for additional savings with lower copays, a lower deductible, and more services covered with no deductible at all. This financial assistance is only available to those who purchase a Silver plan. Thus, while a Silver plan may have monthly premiums that are higher than a Bronze plan’s, insureds should include possible subsidies when considering their total costs. For those who qualify, maximum annual out-of-pocket costs – counting deductible and all payments after the deductible is met – could be lowered by thousands of dollars, and deductibles could be lowered as well. Consumers can check online to see if they qualify for these savings.

Those with questions about the options available to them can obtain free help by phone 24 hours a day, every day (except for Thanksgiving and Christmas Day) at 1-800-318-2596. In-person help is also available at local enrollment sites and events, which are listed on Healthcare.gov.

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