Within an insurance plan, a deductible is an amount of money that the enrollee must pay in out-of-pocket medical costs before the insurance company begins to pay its contribution toward covered medical expenses. Some medical services such as preventive care may be exempted from deductible obligations.
Deductibles are a form of cost-sharing.
Deductibles are capped by a health plan’s MOOP.
Deductibles are often the single largest out-of-pocket cost paid by a health plan enrollee. Getting a health insurance plan with a higher deductible can often lower monthly premium expenses. However, a consumer should be prepared to pay that full deductible if their annual medical care usage is high or expensive. If the deductible amount is unrealistic for a person’s budget and savings, he or she should consider enrolling in a health insurance plan that has a lower annual deductible.
Deductibles normally reset at the beginning of the next coverage period (e.g. the beginning of the year). This means that at the beginning of the new coverage period, an enrollee returns to $0 paid towards the deductible.
After the deductible is fully paid by the enrollee, a health plan normally discontinues cost-sharing for that enrollee until the beginning of a new coverage period for the health insurance policy.