Don't Fear the Deductible

When people are shopping for health insurance policies, they too often focus all their attention on the deductible.

This can be a financial mistake. The more important figure to look at in a PPO health insurance plan is the Out of Pocket maximum (OOP)

The deductible is the point where the insurance company starts to split charges with you.

The Out of Pocket Maximun, is the point where you can stop paying money (out of your pocket), and the insurance company takes over paying 100% of covered services.
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In between these two points is the percentage split of charges known as coinsurance (or co-insurance). This split is described as 80/20, 70/30 or 100/0, for example, where the second figure is the percentage you are reponsible for.   
In a worst case scenario you will likely have to pay the out of pocket maximum.

Compare the costs of these two plans:

Deductible:        $500        $2000
Coinsurance:     80/20        100/0
OOP:                   $5000      $2000

In a worst case scenario, would you rather pay $5,000 or $2,000?
An Introduction to the Basics of Medicare     a short video