A deductible is a set amount you may be required to pay out of pocket before your plan begins to pay for covered costs. Not every health plan has a deductible and this amount may vary by plan. Every year it starts over and you’ll need to reach the deductible again for that year before your plan benefits start. Keep in mind that only what you pay for covered medical costs counts towards your plan’s deductible. Your annual deductible can vary significantly from one health insurance plan to another. Plans with higher metal levels (such as “gold” or “platinum” plans) tend to have lower annual deductibles but higher monthly premiums. Plans with lower metal levels (like “bronze” plans) tend to have lower monthly premiums but higher annual deductibles.

Once you’ve reached your out-of-pocket maximum your plan covers 100% of costs for the rest of the year. Some plans may have an annual cap on covered medical costs known as your maximum out-of-pocket. This is separate from your deductible and usually a higher amount. Once you reach this amount your insurance will pick up the entire bill for all other covered care for that year.

Cost sharing amounts like copayments and coinsurance don’t usually count towards your deductible. In fact you generally don’t owe copayments or coinsurance until you’ve met your deductible; that’s when your plan starts to cover its share. Before you reach the deductible, you typically pay the entire cost for covered expenses out of pocket.

Family plans may have two deductibles. If your health plan covers you along with other dependents you may have an individual deductible which applies to each person and a family deductible which applies to the whole family.

All Marketplace plans must cover the full cost of certain preventive benefits even before you’ve met the deductible. This requirement is mandated by the Affordable Care Act. This might include services like wellness check-ups vaccinations or certain preventive screenings. These benefits are covered without cost sharing even if you haven’t met your yearly deductible yet.

You and your health insurance company pay for your health care expenses. Deductibles, coinsurance and copays are all examples of what you pay. Understanding how each example works helps you know how much you pay.

It is the amount you pay for health care services before your health insurance begins to pay. As your plan begins you pay 100% of your Healthcare bills to your healthcare provider or hospital until your out of pocket total equals or “meets” your deductible.

How it works: If your plan’s deductible is $1500 you’ll pay 100 percent of eligible health care expenses until the bills total $1 500. After that you share the cost with your plan by paying coinsurance.

Coinsurance is your share of the costs of a health care service. It's usually figured as a percentage of the amount we allow to be charged for services. You start paying coinsurance after you've paid your plan's deductible.

How it works: You’ve paid $1500 in health care expenses and met your deductible. When you go to the doctor instead of paying all costs you and your plan share the cost. For example your plan pays 70 percent. The 30 percent you pay is your coinsurance.

A copay is a fixed amount you pay for a health care service usually when you receive the service. The amount can vary by the type of service. How it works: Your plan determines what your copay is for different types of services and when you have one. You may have a copay before you’ve finished paying toward your deductible. You may also have a copay after you pay your deductible and when you owe coinsurance.

Most do. You should expect deductibles on these policies:
● Medicare and Medicare Advantage
● Medicaid
● Qualified health plans (QHPs) whether from employers or the health insurance marketplace
● Short-term limited duration health insurance
The higher the deductible the more you’ll have to pay out of pocket before coverage starts. As a result your policy is less likely to deliver you significant value. So high-deductible policies have to sell for lower monthly premiums.
There are also major medical plans with an upfront cost of $0 called no-deductible plans. The good news is that the insurance company begins paying your claims right away. The bad news is that you pay higher monthly premiums and still share costs through copays and coinsurance. VA healthcare and limited medical insurance plans do not have deductibles.

You’ll see various types of deductibles when looking at your policy or comparing plans. Here are some of the most common:
● Comprehensive deductible: This means the deductible applies to all medical services. The only exception is preventive health benefits offered by a QHP.
● Noncomprehensive deductible: The deductible does not apply to certain medical services such as physicals and routine checkups. The plan covers those claims, whether or not you’ve met your deductible.
● Prescription drug deductible: Some insurance plans have a separate deductible for their prescription drugs. The deductible may or may not apply to all the drugs in a plan’s formulary.
● Individual deductible: This is the amount an insured person must spend before their plan starts to pay healthcare claims.
● Aggregate deductible: Family insurance plans can have this type of collective deductible. All money paid toward family members’ individual expenses is credited toward the family deductible. The insurer pays no claims for any family member until the total out-of-pocket spending equals the deductible amount.
● In-network and out-of-network deductibles: These match up with your insurance plan’s network of healthcare providers. For care you get outside of the plan’s network you incur higher deductibles copays and coinsurance amounts.

Deductible amounts vary by plan but here are some numbers to consider:

● For QHPs the 2022 maximum deductible amounts are $8700 per individual and $17100 per family.
● Among employer-based health insurance plans in the U.S. the average deductible amount for 2020 was $1 945 per individual and $3722 per family.
● In the health insurance marketplace the 2021 median individual deductible for bronze-level plans was $6992. For silver plans the median figure was $4879; for gold plans it was $1533.

The best deductible level for you depends on your needs and budget. In general a high-deductible health plan (HDHP) has the advantage of lower monthly premiums. However surprise hospital trips or a diagnosis requiring expensive treatment could leave you in debt if you don’t have the cash to pay that high deductible.

To help you lessen this risk some employer-based HDHPs come with health savings accounts (HSAs). HSAs contain pre tax dollars contributed by both you and your employer. Earmarked for qualified medical expenses those tax-free dollars will go a bit further.

But if you fear sudden strains on your budget managing your expenses with a low-deductible plan may suit you better. You’ll pay a higher monthly premium but you may find you save money overall.

No. Your monthly payments are your health insurance premiums. They are similar to a subscription payment, keeping your account active. You pay your deductible in addition to your premiums.

How different factors work with your deductible. Your deductible is one part of your cost-sharing obligation. After you’ve met it you still have various out-of-pocket expenses related to your deductible. The three main expense types are:

● Insurance premiums: As mentioned above higher deductibles are linked to lower premiums. Similarly lower deductibles typically lead to higher monthly premiums.
● Copays and coinsurance: These cost-sharing charges kick in after you meet your deductible. Copays are flat fees for covered health services such as $30 for a doctor’s visit. Coinsurance is the percentage of the medical bill you’re responsible for paying. For example with 20% coinsurance you’d owe $20 for a $100 doctor’s office visit. Your plan documents will have specific information on when these charges apply.
,● Out-of-pocket maximum: This figure represents the annual limit of what you’ll owe for covered healthcare treatments and services. Beyond that amount, the insurer pays for 100% of the covered services. Deductibles count toward your out-of-pocket maximum, as do all payments you make for covered health services. In tandem with your deductible, your progress toward your out-of-pocket maximum resets to $0 when the new plan year starts.

When you switch jobs the effect on your deductible depends on the source of your insurance coverage. If you have an employer-based plan any deductible contributions you’ve made will not carry over to the new employer’s plan. But your deductible contributions are unaffected if you purchased your policy:

● Through the marketplace
● Direct from the insurer
● Through an insurance agent or broker

Certain healthcare services are excluded from the deductible. That means you can receive the plan benefit at no cost from a network provider whether or not you’ve met your deductible. All ACA plans exclude from the deductible a group of preventive benefits such as screenings immunizations and preventive medications like statins. Your particular policy will list the benefits that don’t require a deductible. Some common examples are:

● Primary care visits and checkups
● Generic and brand-name prescription drugs
,● Specialist visits
● Mental or behavioral outpatient visits

One way to ease the burden of deductibles is to buy supplemental health insurance. This type of plan pays you a lump sum for a specified medical event. The cash can help you pay out-of-pocket healthcare expenses. In considering this option compare the plan’s premium cost to your deductible amount and your available savings. Also assess the likelihood that you’ll need medical services. If you decide to pay by credit card try to use one that offers an introductory 0% annual percentage rate (APR). Some cards allow you to set up low-APR,installment plans to pay off large purchases. Call your credit card’s customer service department to ask about your options.

If you use a GoodRx coupon to purchase a drug covered by your plan, you can submit your receipt to your insurance company, requesting that they count the expense toward your deductible. Ask your insurer what other information you should submit with your claim.

Deductibles are a cost-sharing feature of almost every health insurance plan. Plans may impose different deductibles for different treatments or services. For example, ACA-compliant plans charge no deductible for preventive care services. If your plan has a high deductible, adding a health savings account or supplemental insurance may help you manage the expense over time.