FEATURES OF HEALTH INSURANCE POLICIES

VII FEATURES OF HEALTH INSURANCE POLICIES

Nearly all health insurance policies in the United States share a few common features, regardless of whether the policies are purchased by individuals or through an employer. These features generally define the extent of benefits provided by a given health insurance policy.

A Deductible

Health insurance policyholders pay a specified amount of money each year for medical services before the insurance policy pays anything at all. This amount is called the deductible. For example, a person who selects a policy with a $500 deductible agrees to pay the first $500 of medical costs in a given year. Likewise, the insurance company agrees to pay some or all costs that exceed $500. Policies with a low deductible generally charge a relatively high monthly fee—called a premium—to maintain the insurance account. Policies may express the deductible in terms of per-person and per-family amounts. For example, the policy might provide for a deductible amount of $250 per person, but it might also set a maximum deductible of $500 per family when more than one person in the family has incurred medical expenses.

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