Insurance Deductible

Q: How does the health insurance deductible work?

A: A deductible is a form of cost-sharing that is commonplace in insurance plans.  For larger expenses, such as an ER visit or surgery a covered participant is required to meet the deductible (pay a portion out of pocket) before the insurance kicks in.  However, the expenses that make up the deductible are still discounted services.  For example, let's say Joe DriveTime breaks his leg.  Joe goes to the ER for treatment.  Joe's total ER bill came to $5000. Luckily, Joe is enrolled on the DT Traditional Medical Plan.  First, UHC applies their network discount.  This reduces the claim to $2,500.  Next, of the $2,500 remaining balance, $250 is applied to Joe's deductible.  Finally, the remaining $2,250 is paid by the medical plan at 80% ($1,800) leaving Joe responsible for the balance of $450.00 plus the $250 deductible.

Original Claim Amount $5,000.00
Network Discount $2,500.00
Insurance Payment $1,800.00
Joe's Total Payment $700.00