The deductible is the amount you must pay for your healthcare before the plan begins to pay for the medical care. This amount will not be reimbursed to you. You can increase the deductible you are willing to pay to decrease the cost of your premiums.
A deductible works differently in different health insurance plans:
- Most plans have a yearly deductible, which means that once you reach this amount, the insurance company will start paying for your medical services. This is regardless of whether you have requested treatment for a variety of medical conditions or received different kinds of treatments. This deductible is also accumulative for all your medical beneﬁts (doctor visits, medication and hospitalization are under the same deductible).
If you do not reach the level of the deductible during your policy year, then your deductible count restarts at the time of renewal, and you start to be charged again and a new accumulation period begins. (Whether you reach the level of the deductible during your policy year or not, your deductible count restarts at the time of renewal.)
- Other plans have a deductible which is per medical condition or claim, which means that for each medical condition or claim, you have to pay the deductible again.
- In certain health insurance plans, there is a carry-over period, where the expenses paid can be carried over into the next year’s deductibles.
For example, you select a plan that has a $250 deductible:
- You go to the doctor for the ﬁrst time and pay a $300 bill. You make a claim to the insurance company and they approve it. Of the $300, $250 will be discounted from your deductible. This means the company will only reimburse you $50. But from then on, you will receive full beneﬁts from your policy during this policy year.
- You go to the doctor for the ﬁrst time and pay a $190 bill. You make a claim, the company approves it. This amount will be discounted from your deductible, you will not receive a reimbursement, and your remaining deductible is $60.