Understanding Health Insurance Deductibles

Deductibles Without the Confusion

What counts toward it and what does not

Payments for covered medical services count toward your deductible. Premiums do not. Copays often do not either, depending on the plan. This is why someone can pay thousands in premiums and copays and still have an untouched deductible.

Before and after the deductible

Before you meet it, you pay the negotiated rate for most non-preventive care. After you meet it, coinsurance kicks in and the plan pays the larger share. Preventive care is typically free regardless.

Family plans have two deductibles

Family coverage usually carries an individual deductible for each member and a family deductible for everyone combined. Once one person hits the individual amount, the plan starts paying for that person even if the family total is unmet. Knowing this changes how you plan a year with a surgery or a pregnancy in it.

Watching a Deductible Get Met

The following is a fictional, illustrative example only, using round numbers. It is not a quote or a description of any real plan or claim. Imagine a $2,000 deductible plan and a year with three visits:

• January — annual physical: Preventive care, covered at no cost. Deductible remains $2,000 unmet.
• April — urgent care visit for a sprained ankle: Negotiated rate is $340. The full $340 goes toward the deductible, which now has $1,660 remaining.
• September — minor outpatient procedure: Negotiated rate is $2,100. The remaining $1,660 of the deductible is paid, meeting it. Coinsurance then applies to the remaining $440 of that bill.

From that point through the end of the plan year, coinsurance (rather than the full negotiated rate) applies to further non-preventive care, until any out-of-pocket maximum is reached.