What Is Preoccurrence Deductible In Health Insurance?

Health insurance policies come with different types of deductibles that help determine how much policyholders pay for their medical expenses. One such deductible is the preoccurrence deductible. But what is it how does it affect your healthcare costs?

Definition of a Deductible

A deductible is the amount you pay out of pocket toward your healthcare expenses before your health insurer starts covering your medical costs. For instance if your deductible is $1000 then you’ll be responsible for paying the first $1000 of your healthcare expenses your insurer pays the rest.

Preoccurrence Deductible: An Overview

A preoccurrence deductible also called a front-end deductible applies before the insurer starts covering a specific medical treatment or service. For instance if you have a preoccurrence deductible of $500 for physical therapy you’ll need to pay the first $500 for all physical therapy sessions before you can start receiving coverage from your insurer.

The preoccurrence deductible applies separately from the overall deductible limit. So let’s say you have a health plan with a $1000 deductible a $500 preoccurrence deductible for physical therapy. If you receive $400 worth of physical therapy during your first visit you’ll need to pay the entire amount because it’s less than your preoccurrence deductible. However if you received $700 worth of physical therapy during that first visit you’d pay the first $500 (preoccurrence deductible) $200 would go towards fulfilling your overall deductible.

Benefits Drawbacks of Preoccurrence Deductible

One main benefit of preoccurrence deductibles is that they help insurers reduce their costs when covering specific medical treatments or services. By forcing policyholders to pay some of the expenses upfront insurers can limit the chances of overconsumption of medical services. This practice ensures that individuals don’t waste medical resources which can lead to increased healthcare costs.

On the other hand preoccurrence deductibles can be disadvantageous to policyholders mainly because they can increase out-of-pocket expenses. Since policyholders need to meet the preoccurrence deductible for each service they get they may end up spending more than they would have if they only had an overall deductible to worry about.

Final Thoughts

Preoccurrence deductibles are a unique feature of some health insurance policies that policyholders should understto know how it affects their healthcare costs. Before choosing a health plan it’s essential to check the deductibles ensure that you have an adequate understanding of the terms conditions.

The deductible you choose can have a significant impact on how much you pay out of pocket in medical expenses. Therefore it’s best to explore all the available options to find a deductible that balances your healthcare needs budget.