Your health insurance deductible is the amount that you pay before the company starts paying for your healthcare. Once you reach your limit, the insurance company collects the rest of the bill. Generally, the higher your deductible, the lower the premium. Figuring out your out-of-pocket medical expenses, including a deductible, is important to managing your healthcare costs. This article will talk about insurance deductibles and how they affect your healthcare coverage. 


How does an insurance deductible work?

Before you can provide full coverage for your healthcare, you must first pay something toward the services that you need. This is referred to as cost sharing. A deductible is one of the ways that the insurance company will typically require you to pay for your healthcare.


Family and individual health insurance policies can have a deductible structure that doesn’t require the company to pay for all of the services. Instead, it will pay for some of the services that you need before the deductible is met.


A typical insurance deductible is $2,500. To meet this amount, you must make qualifying payments. After reaching the required amount, the insurance company will then pay the rest of the bill. Coinsurance is the method utilized by the company to share the cost with the client.

Some things to keep in mind about insurance deductibles: 

  • Some health plans do not have a deductible. 
  • The deductible amount can vary yearly, and it resets every year. 
  • Your out-of-pocket expenses also count toward the deductible.


When you choose a health insurance plan from the marketplace, it usually requires you to pay for some of the preventative services that are included in the plan. This is true regardless of if you are looking for a PPO or HMO plan. HIV Screenings, blood pressure screenings, and lung cancer screenings are among some of the preventative benefits that are included. 


How does it work?

After reaching your deductible, the insurance company will typically pay a copayment or a portion of the bill. The remaining balance will be handled by the company.


The exact amount of the copayment that the insurance company will require you to pay varies depending on the type of service that you’re receiving and the plan that you are in. For instance, a $15 copayment for an office visit may be higher for a specialist. 


Understanding the various terms used by the insurance company will allow you to make an informed decision regarding the amount that you’ll be required to pay for your healthcare.

Premium: The amount that has to be paid for health insurance each month

Deductible: The amount that you need to pay out of pocket before your health insurance pays for your health care costs

Copay: the amount of money you pay for the health care services that insurance covers; it’s kicked in after your deductible is reached. 

Coinsurance: Starts after the deductible is reached; the percentage you pay for your health services that are covered by insurance

Out-of-pocket maximum: the most money you have to pay for your health insurance each year. 

These are just a couple of things that you should keep in mind when looking at healthcare deductibles.