What It Means
A health insurance deductibleInsurance deductibleThe part of a covered loss you pay yourself before your home, renters or auto insurance pays the rest, set as a dollar amount or a percentage. See more is the amount you pay yourself for covered care before your plan begins to share the cost. On a plan with a $2,000 deductible, for example, the first $2,000 of covered services is yours to pay. After that you usually pay a copayCopayA fixed dollar amount, such as $20, that you pay for a covered health care service under your health insurance plan. See more or coinsuranceCoinsuranceYour share of the cost of a covered health care service, set as a percentage such as 20%, that you pay after meeting your deductible. See more while the plan pays the rest, until your spending reaches the out-of-pocket maximumOut-of-pocket maximumThe most you pay in a plan year for covered in-network care through deductibles, copays and coinsurance, after which the plan pays covered benefits in full. See more.
Try It: Watch a Deductible Fill Up
Slide to add up covered medical bills over a year on an example plan, and watch the point where the plan starts sharing the cost.
Still inside the deductible, so you pay the full covered cost of each bill.
Deductible met. You now pay your coinsurance share and the plan pays the rest.
Out-of-pocket maximum reached. The plan now pays covered in-network care in full.
How People Say It
- "We haven't hit our deductible yet this year."
- "Once the deductible's met, it's just 20% after that."
- "Hold off on the MRI until you know what the deductible is."
The Breakdown
Worked example. A plan with a $2,000 deductible, 20% coinsurance after it, and a $6,000 out-of-pocket maximum. These bills are an example:
| Covered bill | You pay | Plan pays | Deductible met so far |
|---|---|---|---|
| $500 | $500 | $0 | $500 of $2,000 |
| $1,000 | $1,000 | $0 | $1,500 of $2,000 |
| $1,500 | $700 | $800 | $2,000, met |
| $3,000 | $600 | $2,400 | Met |
| Total $6,000 | $2,800 | $3,200 |
The third bill is the turning point: $500 of it finishes the deductible, and you pay 20% of the other $1,000, which is $200, for $700 in all.
What the result means. Until the deductible is met, you carry the covered cost on your own. After it, your share shrinks to the coinsurance rate or a copay. With the same bills, a higher deductible leaves more of them to you before the plan starts sharing, which is why it's worth weighing the premiumInsurance premiumThe amount you pay to keep an insurance plan, such as health insurance, in force, usually monthly, quarterly or yearly, whether or not you use any care. See more and the deductible together.
Deductible or out-of-pocket maximum? The deductible is the first stretch of your spending. The out-of-pocket maximum is the ceiling on everything you pay for covered in-networkIn-networkDescribes a doctor, hospital or other provider that has a contract with your health plan, so you usually pay less for covered care than you would outside the network. See more care in deductibles, copays and coinsurance combined.
Good to Know
HealthCare.gov notes that all Marketplace plans pay the full cost of certain preventive benefitsBenefits packageEverything an employer offers on top of wages, such as health insurance, paid leave and a retirement plan, which can be worth thousands of dollars a year. See more even before you meet your deductible. Many plans also pay for some services, like a checkup or a disease management program, before the deductible. Read your plan's details to see which services skip it.
FAQ
What's the difference between a deductible and an out-of-pocket maximum?
The deductible is what you pay before the plan starts sharing costs. The out-of-pocket maximum caps your total spending on deductibles, copays and coinsurance for covered in-network care; once you reach it, the plan pays for covered benefits in full.
Do I have to meet my deductible before insurance pays anything?
Not for everything. Marketplace plans cover certain preventive benefits at no cost before the deductible, and many plans pay for some services, such as a checkup, before you meet it.
Is a high deductible plan worth it?
It depends on how much care you expect. Add a year of premiums to your likely out-of-pocket costs under each plan and compare the totals; the health insuranceHealth insuranceA plan you pay a premium for that covers part of your medical costs, while you pay your own share through a deductible, copays and coinsurance. See more calculator runs this for two plans side by side.
Do It in Buhata
Budget
Log each medical bill in Budget as it arrives, so you can add up how much of this year's deductible you've already paid.
Open BuhataRelated Terms and Categories
- Health insurance
A plan you pay a premium for that covers part of your medical costs, while you pay your own share through a deductible, copays and coinsurance.
- Copay
A fixed dollar amount, such as $20, that you pay for a covered health care service under your health insurance plan.
- Coinsurance
Your share of the cost of a covered health care service, set as a percentage such as 20%, that you pay after meeting your deductible.
- Out-of-pocket maximum
The most you pay in a plan year for covered in-network care through deductibles, copays and coinsurance, after which the plan pays covered benefits in full.
- Health savings account
A tax-advantaged account for medical costs, open to people with an HSA-eligible health plan, where money goes in, grows and comes out for care without federal income tax.
- Insurance deductible
The part of a covered loss you pay yourself before your home, renters or auto insurance pays the rest, set as a dollar amount or a percentage.
Sources
HealthCare.gov Glossary, "Deductible"; HealthCare.gov Glossary, "Copayment"; HealthCare.gov Glossary, "Coinsurance"; HealthCare.gov Glossary, "Out-of-pocket maximum/limit"
- www.healthcare.gov/glossary/deductible
- www.healthcare.gov/glossary/co-payment
- www.healthcare.gov/glossary/co-insurance
- www.healthcare.gov/glossary/out-of-pocket-maximum-limit
Last updated .