What Is a Health Insurance Deductible?

When managing your health insurance, it's essential to understand the different costs involved. This guide will help you navigate terms like deductibles, copayments, coinsurance, and out-of-pocket maximums.

First things first: What is a Deductible?

A deductible is the amount you pay for covered health care services before your insurance plan starts to pay. For instance, with a $2,000 deductible, you pay the first $2,000 of covered services yourself. After you meet your deductible, you usually pay only a copayment or coinsurance for covered services, and your insurance company covers the rest.

Things to know about deductibles:

Many plans cover certain services, such as checkups, generic prescriptions or disease management programs, before you've met your deductible.

All Marketplace health plans pay the full cost of certain preventive benefits even before you meet your deductible.

Some plans have separate deductibles for specific services, like prescription drugs.

Family plans often have both an individual deductible (applies to each person) and a family deductible (applies to all family members).

Types of Deductibles

There are various types of deductibles to be aware of:

Medical Deductible and Prescription Deductible:

Medical deductible: Costs related to medical services count towards this.

Prescription deductible: Costs related to prescription medicines count towards this.

Network Deductible and Out-of-Network Deductible:

Network deductible: Costs for network care count towards this.

Out-of-network deductible: Costs for out-of-network care count towards this.

Individual Deductible and Family Deductible:

Individual Deductible: This is the amount one person must pay out-of-pocket for covered healthcare services before the insurance plan starts to pay. Once an individual meets their deductible, the plan will cover additional healthcare costs for that person.

Family Deductible: This is the total amount that a family must pay out-of-pocket for covered healthcare services before the insurance plan starts to pay for any member of the family. The family deductible is usually higher than the individual deductible and applies to the combined healthcare costs of all family members.

High Deductible Health Plan vs. Low Deductible Health Plan

High Deductible Health Plans (HDHPs):

Have higher deductibles but lower premiums.

Suitable for those who are generally healthy and do not expect to need much medical care.

Can be paired with a Health Savings Account (HSA), allowing pre-tax contributions for medical expenses.

Low Deductible Health Plans:

Have lower deductibles but higher premiums.

Ideal for those who need regular medical care or have chronic conditions.

The plan starts paying for services sooner, helping to manage out-of-pocket costs better.

Choosing the Right Plan

When choosing a health insurance plan, consider your health care needs and budget:

If you are young, generally healthy, and do not expect to need much care, a high deductible plan might be right for you.

If you have a family, expect to need regular medical care, or have a chronic condition, a low deductible plan might be better suited to your needs.

Special Note for Utah Residents

If you are in Utah, the general guidelines for high and low deductible plans may not apply to you. Utah offers unique options such as a $0 deductible Bronze plan, which is highly popular and provides excellent value. Additionally, you can get help from a licensed agent at no additional cost to find the best plan for your needs.

Understanding the various components of health insurance costs, including deductibles, can help you choose a plan that best fits your needs and budget. Whether you opt for a high deductible health plan with lower premiums or a low deductible plan with higher premiums, the key is to find a balance that works for your specific situation. If you're in Utah, take advantage of the unique plans available and free assistance from licensed agents to make the best choice for your healthcare coverage.

If you're in Utah and need help selecting or enrolling in a health plan, don't hesitate to reach out to a licensed agent. They are there to make the process easier and ensure you find the best coverage for your needs.

Revive Insurance can help you find a plan that works for you. Contact our licensed insurance agents at (801) 901-8448 or talk with a licensed health insurance agent in your area.

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Graph Sources

- Kaiser Family Foundation Marketplace Average Benchmark Premiums

- How ACA Marketplace Premiums Are Changing by County in 2023

Disclaimer: The information provided in this blog post is for general informational purposes only and is not intended to be a substitute for professional advice, diagnosis, or treatment. Always seek the advice of your insurance provider, licensed agent, or other qualified health provider with any questions you may have regarding your health insurance options. While we strive to provide accurate and up-to-date information, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the information contained herein. Any reliance you place on such information is therefore strictly at your own risk.