When you're shopping for health insurance, one number keeps coming up: the deductible. It sounds simple enough, but the way it actually works in practice confuses a lot of people. Let's break it down.
What is a deductible?
A deductible is the amount you pay out of pocket for covered health care services before your insurance plan starts to pay. For example, if your deductible is $1,500, you'll pay the first $1,500 of covered medical costs yourself. After that, your insurance kicks in.
What counts toward your deductible?
Most covered medical services — like doctor visits, lab work, imaging, and hospitalizations — count toward your deductible. However, many plans cover preventive services (like annual checkups and certain screenings) at no cost to you, even before you meet your deductible.
What happens after you meet your deductible?
Once you've met your deductible, you typically move into a cost-sharing phase where you pay a copay or coinsurance for services. For example, your plan might pay 80% of costs and you pay 20% until you hit your out-of-pocket maximum — after which your insurance covers 100%.
High-deductible vs. low-deductible plans
Plans with higher deductibles generally have lower monthly premiums. If you're generally healthy and don't expect many medical expenses, a high-deductible plan can save you money. If you have regular prescriptions or anticipated procedures, a lower-deductible plan may cost less overall.
The bottom line
Understanding your deductible is essential to choosing the right plan. If you're unsure which option makes sense for your situation, I'm happy to walk through the numbers with you. That's exactly what I'm here for.