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7 Things to Know About Your Healthcare Deductible

Many people evaluate health insurance costs by how much they pay for their premiums. However, if you want to lower your health insurance costs, understanding your deductible is more important than your premium. 

A deductible is an amount you need to spend on your health insurance until your coverage begins. After you pay your deductible, you usually pay only a copayment (fixed amount for services after meeting deductible) or coinsurance (percentage of costs for services after the deductible is paid) for covered services. Your insurance company pays the rest.

For example, if you have a $1,500 deductible, your health insurance plan will not pay for any services until you pay $1,500 for covered health services. After you meet the deductible, you will have to pay a copayment for any covered services. 

Typically, plans with lower monthly premiums have higher deductibles. Plans with higher monthly premiums usually have lower deductibles. If you are willing to pay more upfront, you will save on your monthly premium. 

7 Important Things to Know About Your Health Insurance Deductible

Preventive services such as a flu shot, physical exam or mammogram do not count towards your deductible

In accordance with the Affordable Care Act, all individual insurance plans bought from a government-run marketplace cover these services in full and you will not need to contribute anything. Most employer-based plans and individual plans purchased directly from the insurer also cover preventive services.

Medical services subject to a deductible vary according to your health plan

You should consult your plan documents for specific information on your deductible. When evaluating plans, make sure to read the fine print to understand what services are subject to the deductible.

Deductibles are not the same as out-of-pocket maximums

An out of pocket maximum is the most you have to spend for covered services in a year. After you reach this amount, the insurance company pays 100% for covered services. The out-of-pocket maximum includes any copayments or coinsurance payments you make as well as your deductible. The deductible only includes money paid toward health services. 

Health insurance premiums, copays, and coinsurance payments do not count toward your deductible

Only payments for covered medical services satisfy your deductible. 

Family health insurance plans have two deductibles – a family deductible and an individual deductible for each family member

It is possible for the family deductible to be met just by one individual requiring many medical services and treatments.

Your health plan may have a separate deductible for prescriptions

You will have to meet this deductible before your insurance company pays anything for prescriptions.

You specify your deductible when you sign up for your health plan during open enrollment

It remains the same for the whole plan year. In order to decide on a high-deductible plan or a low-deductible plan, you will need to estimate the medical services you and your family will utilize in the coming year. While it’s impossible to predict an exact amount, you can estimate based on what you usually pay. 

Summary

Choosing a health plan can be a very complicated task. Understanding what a deductible is and how it works will help you decide on the best health plan to meet your needs. There’s a big difference between a $500 deductible and a $5,000 deductible. 

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Sue from Atlanta, Georgia
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