A medical insurance deductible is the amount you pay for covered health care before insurance starts sharing costs. It is the most misunderstood part of health plans — and one of the most financial. Here is the clear explanation.
How a Deductible Works
Each year, you pay 100% of covered costs up to your deductible. Once met, insurance shares costs via copays/coinsurance until your out-of-pocket maximum, after which it pays in full.
Deductible vs Premium
Plans trade off: higher premiums usually mean lower deductibles; low-premium 'high-deductible' plans shift more cost to you until the deductible is met.
Important Nuances
- Preventive care is often covered before the deductible.
- Copays and some services may not count toward it.
- The out-of-pocket maximum caps your total exposure.
How to Choose
Estimate your expected care: healthy people often save with high-deductible plans; frequent-care households may prefer lower deductibles.
FAQ
What happens after I meet the deductible?
Insurance starts sharing the cost of covered services (coinsurance) until your out-of-pocket max.
Do prescriptions count toward the deductible?
Sometimes; check your plan's drug benefits.
Related: US Medical Insurance and Individual Cover.