A health insurance deductible is the amount you pay before your insurance kicks in. It's the amount you pay out-of-pocket for covered health care services before your plan starts to cover the costs. Deductibles are different from premiums, and it's important to compare the two when selecting a plan. For those who don't use the health care system often, it may be wise to choose a plan with a higher deductible and lower monthly premiums.
High-deductible health plans (also known as consumer-driven health plans) have higher deductibles than traditional plans. This means that you'll have to pay a fixed amount out-of-pocket before your insurance begins to cover medical expenses. It's also important to consider the maximum outlay of plans in the health insurance marketplace. This is the limit of what you'll have to pay for covered health care services in a year.
If you have a chronic condition, it may be more cost-effective to choose a plan with a high deductible and low monthly premium, plus an employer contribution to an HSA. Once you've paid your deductible for the year, your insurance benefits will take effect and the plan will cover 100% of the included medical costs for the rest of the year. To help you save and be prepared to pay your deductible, some high-deductible plans can be combined with a health savings account (HSA). Alternatively, there are health insurance plans with no deductibles where cost-sharing benefits start right away.Understanding your out-of-pocket medical expenses, including deductibles, is an important part of managing your health care costs.
It's essential to consider how often you use the health care system and how many services you may need next year when selecting a plan.