When you enroll in a health insurance plan, regardless of whether it’s a plan through your employer, the Marketplace, Medicare or a private plan, there are certain plan components you must understand. One of those components is your deductible, or your out-of-pocket responsibility before your health insurance plan starts covering costs of eligible medical expenses.
Learn more about health insurance deductibles and how they work below.
What Is a Deductible?
Simply put, a health insurance deductible is the annual out-of-pocket amount you owe for health care services before insurance steps in to pay for a larger portion of your health care costs. Deductible amounts can vary widely depending on which market your plan is from and your chosen plan. In general, choosing a health plan with a higher deductible means your premiums may be lower. However, it also means that you’re responsible for higher out-of-pocket costs before coverage steps in to help if you’re sick, injured or need a procedure.
How Does a Deductible Work?
If you have an individual health plan, or a health plan just for yourself, there will only be one deductible listed on your plan. After you’ve met your deductible, you may have another cost-sharing requirement per your plan called coinsurance. This means that you’ll pay a percentage of the costs you incur, and your insurer will pay the rest. For example, if your coinsurance is 20{b59ede858ba4b16a03d347c2272a483bde331cecfbcd82ec376828a6a29b0f19}, your plan will pay the remaining 80{b59ede858ba4b16a03d347c2272a483bde331cecfbcd82ec376828a6a29b0f19} of the cost.
In some plans, you’ll continue to pay out-of-pocket costs until you’ve reached your annual out-of-pocket maximum (OOPM). Once you hit your OOPM, your plan will typically cover all remaining eligible medical expense costs you incur for the remainder of the year.
If you have dependents (e.g., a spouse or children) listed on your health plan, they will also have their own deductibles. Additionally, you will have a family deductible listed on your plan. All costs for covered services under your plan incurred and paid toward an individual’s deductible will also go toward the family deductible. When you hit the family deductible—similar to hitting an individual’s deductible—you may continue to pay certain out-of-pocket costs, such as coinsurance or copays until you hit your plan’s OOPM, if there is one. However, you do not need to hit each person’s individual deductible for lowered costs once you’ve hit your family deductible.
How Can I Learn More?
To learn more about your health insurance plan, reach out to the specialists at I & E Insurance Agency. We’re here to help you better understand your health benefits and learn how to maximize your coverage.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.
