What Is a Health Care Deductible?

Health care deductibles are an integral component of most health insurance plans. Deductibles represent the amount you must pay each year towards health care costs before your insurer begins sharing them with you. Most commonly seen are individual coverage deductibles and family coverage deductibles; however some plans may offer unique deductibles depending on which services or healthcare providers fall under coverage or not.

Your decision regarding your health plan’s deductible can significantly impact its monthly premium. A higher deductible can reduce monthly premium costs; just make sure that you understand its workings first before making your choice.

Assuming you meet your health care deductible each year, the first amount that is deducted from your healthcare expenses each year is for services or medications covered by your plan once you meet that deductible amount. These services should typically be considered medically necessary and the expenses that count toward meeting it include doctor or therapist visits, prescription drugs and imaging exams (MRI). Other expenses which count include diagnostic tests or hospitalizations as well. However, braces or orthotics will not count toward meeting it.

Once your deductible has been met, copayments and coinsurance fees for healthcare expenses become applicable. Your out-of-pocket maximum resets every year.

A deductible can help make you an active consumer of health care, only seeking it when absolutely necessary rather than for routine visits or screenings. This helps both you and your insurance provider control health care spending costs.

Deductibles also encourage you to find cost-effective healthcare options, using online tools and resources to compare prices for different healthcare providers, including out-of-network ones.

Compare deductibles between health insurance plans to find one that is right for you. Some plans, like health maintenance organizations (HMO) and exclusive provider organizations (EPO), only cover healthcare delivered within their network of providers, helping keep deductibles low.

Your health insurance deductible typically applies only to providers within your network of healthcare providers, though once you’ve met your individual deductible for the year your family deductible may kick in as a means of offering low cost premiums for families. Out-of-network healthcare expenses could far outweigh what your deductible covers; thus, it is wise to carefully weigh all available plans before choosing one with a family deductible.