Navigating medical insurance and deductibles can be overwhelming.  This time of year, when deductibles start over and many people have high deductibles, it is often appealing to pay for a medical service directly and not submit to insurance.  

That may or may not be in your best interest. This article will explain the pros and cons of using medical insurance when you have a high unmet deductible.

Coverage, Deductible and Copay Basics

When a doctor visit or medical service is billed to insurance, the insurance company confirms that it was a valid service by an approved provider, and it sets a reasonable rate or fee for the service.  Then the rate will either apply to deductible meaning the patient is expected to pay for the service. Or if the deductible has been met, then insurance will pay a percentage, leaving a percentage for the patient, called copay. Learn more about coverage, deductible, and copays.  

Using Medical Insurance 

Submitting a service claim to insurance can be a hassle because it may require that you see a doctor first, get a referral from your PCP (primary care provider), or get copies of the doctor’s notes and orders.  That is often handled by the provider, but as the patient, you may need to take extra steps.     

The ideal scenario is when your deductible is met, and you receive a needed, covered service or product from an in-network provider.  The insurance will pay for the service and just leave you with a small percentage of the fee. 

For an insurance claim, you must take steps to find an in-network provider and get pre-approval for your procedure. When there is a high deductible, you will still be responsible for the fee that insurance sets.  If you meet your deductible later in the year, you may benefit from this expense — but you won’t know until then. 

Instead, if you decide to pay directly for the service (and bypass insurance), you can ask for a discounted rate. You might even negotiate a lower fee since the provider doesn’t have the hassle of filing to with insurance.

Medical Insurance and The Benefit of Clinical Reviews

There is another benefit of insurance to remember: their clinical team reviews all services/treatments to determine if they are necessary and beneficial. Also, providers must show their qualifications in order to contract in-network.  This ensures the quality of service and proven results.  

For example, a home sleep test provider must be accredited by The Joint Commission(ensuring excellence in care); your test results will be reviewed by technicians and  a physician certified by the American Board of Sleep Medicine, and the sleep specialist will make an accurate diagnosis.

Cash Pay/Paying Directly: Steps to Take

If you decide to pay directly for a service — and eliminate the hassle of insurance — you should take time to do your research. Look into the benefits and risks of the service/treatment. Check the qualifications of the provider. 

For example, if you are going to order a CPAP from a website, you are responsible to making sure the equipment has latest technology — and that your purchase includes setup and training.    

Here is an overview of everything to consider:

Utilizing Medical Insurance: When Paying Direct:
Cost of service applies to deductible, so medical costs later in year may be paid for 100% You eliminate hassle of required doctor visit, PCP referral, and getting copies of paperwork
Insurance company negotiates appropriate rate or fee with the doctor or service provider You can negotiate your own discounted rate
Insurance company medical specialist will have guidelines for when a service is necessary and beneficial You can get any service, even if insurance doesn’t consider “medically necessary”; you should research the service and not just follow a suggestion
Insurance company requires qualifications and medical standards specific to service provided  You must check background and qualifications of medical provider on your own
Insurance companies will contract with specific doctors and service providers as “in-network”  You can see any doctor or use any provider whether  in-network or out-ot-network


Medical insurance can be confusing, but with a little research you can find the best option for your situation.  Don’t let the confusing processes and terminology discourage you from getting the care you need to live your best life!