A per-cause deductible is a type of deductible in health insurance where the insured must pay a separate deductible amount for each individual illness or injury that requires medical treatment. Unlike an annual deductible, which is met once per policy year regardless of the number of medical events, a per-cause deductible applies each time a new medical condition arises. Here’s a detailed explanation:
- Deductible for Each Incident:
- With a per-cause deductible, the insured is responsible for paying a set amount out-of-pocket for each separate illness or injury before the insurance coverage begins for that particular event.
- Application:
- This means if you have multiple unrelated medical issues in the same policy period, you must meet the deductible separately for each one. For example, if you break your arm and then later develop a severe infection, you would need to pay the deductible amount for the treatment of your broken arm and then pay it again for the treatment of the infection.
- Coverage Begins After Deductible:
- Once the per-cause deductible is met for a specific medical condition, the insurance plan starts to cover the eligible expenses related to that condition, typically subject to co-insurance or co-payments.
- Examples:
- If your per-cause deductible is $500:
- You incur $800 in medical expenses for treating a broken leg. You pay the first $500 (the deductible), and then your insurance covers the remaining $300, according to the plan’s terms.
- Later in the same year, you need treatment for pneumonia, which costs $1,000. You again pay the first $500 (the deductible), and your insurance covers the remaining $500.
- If your per-cause deductible is $500:
- Comparison with Other Deductibles:
- Annual Deductible: An annual deductible requires you to pay a set amount out-of-pocket each policy year before the insurance starts to cover any medical expenses. Once met, no additional deductible is required for other conditions within the same year.
- Integrated Deductible: Applies to multiple types of coverage (e.g., medical and prescription drugs) within a single policy, requiring you to meet one combined deductible amount.
- Advantages and Disadvantages:
- Advantages:
- Can potentially lower premiums, as the insurer’s risk is spread across multiple deductibles.
- Disadvantages:
- Can result in higher out-of-pocket costs for individuals with multiple, unrelated medical conditions within the same policy period.
- Advantages:
In summary, a per-cause deductible requires the insured to pay a separate deductible for each individual illness or injury. This type of deductible can lead to higher out-of-pocket costs if multiple medical issues occur but can sometimes result in lower insurance premiums.