A deductible is the amount you pay for health care before your insurance kicks in. For example, if your deductible is $1,500, you will pay the first $1,500 in medical bills out of your own pocket. Deductibles are cumulative over the course of a calendar year – each time you pay a small bill, it counts towards your deductible. Once you've reached your deductible, your insurance will begin to pay the majority of medical expenses. Each year on January 1st, your deductible resets and you start all over.
Heads up though! Family deductibles work differently than individual deductibles. Every time someone in the family pays for medical care, that cost will go toward the family deductible. But it will also go toward the individual deductible of the family member who received care. If that family member hits their individual deductible, insurance will kick in and begin to share the cost of medical care for them (and them only). Everyone else in the family will still be responsible for paying for care out-of-pocket until they've either met their own individual deductible or the family fulfills the family deductible.
It is important to note that many plans offer several doctor's visits a year at a reduced cost even if you haven't reached your deductible, so don't assume that you'll have to pay your whole deductible before seeing the benefits of your insurance plan!
- Plans with low premiums generally have high deductibles. High deductible plans are best suited for people who are generally healthy, don't expect to go to the doctor often, and only need catastrophic coverage. Remember, with high deductible plans you should put some money aside so you're prepared to pay your deductible if necessary.
- Some plans have very low (even $0) deductibles, but they also have much higher premiums. These plans are best for people who expect to have a lot of medical expenses or would rather pay-upfront for some extra peace of mind.
- The next time you go to the doctor for a preventative visit, tell the doctor that it should be noted as preventative. This ensure that your doctor bills your insurance company correctly and may lower your personal out of pocket costs.