Everything You Need to Know About Meeting Your Health Insurance Deductible

Meeting your health insurance deductible is a significant milestone in your coverage. It means you’ve paid a certain amount of money out of pocket for covered medical expenses, and now you’re eligible for more comprehensive coverage. But what exactly happens once you meet your deductible?

After Meeting Your Deductible, Here’s What Happens:

Once you meet your deductible, you’ll typically pay a percentage of the remaining costs for covered medical services. This percentage is known as coinsurance, and it varies depending on your plan. For example, you might have a coinsurance of 20%, which means you’ll pay 20% of the cost of covered services after you meet your deductible.

You’ll continue to pay coinsurance until you reach your out-of-pocket maximum. This is the most you’ll have to pay for covered medical expenses in a year. Once you reach your out-of-pocket maximum, your insurance company will pay 100% of the costs for covered services for the rest of the year.

Example:

Let’s say you have a health insurance plan with a $2,000 deductible and a 20% coinsurance. You’ve already paid $2,000 in out-of-pocket medical expenses this year, so you’ve met your deductible. Now, you go to the doctor for an office visit that costs $100. You’ll pay 20% of the cost, which is $20. Your insurance company will pay the remaining $80.

If you continue to have medical expenses throughout the year, you’ll continue to pay coinsurance until you reach your out-of-pocket maximum. Once you reach your out-of-pocket maximum, your insurance company will pay 100% of the costs for covered services for the rest of the year.

What If You Haven’t Met Your Deductible?

If you haven’t met your deductible yet, you’ll have to pay the full cost of covered medical services out of pocket. This can be a significant financial burden, so it’s important to plan ahead and budget for these expenses.

How to Save Money on Health Insurance

There are a few things you can do to save money on health insurance:

Choose a plan with a lower deductible. The lower your deductible, the less you’ll have to pay out of pocket before your insurance starts to cover costs. However, plans with lower deductibles typically have higher premiums.
Increase your deductible. If you’re healthy and don’t expect to have many medical expenses, you can increase your deductible to lower your premiums. However, if you do have a lot of medical expenses, you could end up paying more out of pocket in the long run.
Contribute to a health savings account (HSA). HSAs are tax-advantaged accounts that allow you to save money for qualified medical expenses. You can contribute up to $3,850 to an HSA in 2023 ($7,750 for families). The money you contribute to an HSA is tax-free, and it grows tax-free. You can use the money in your HSA to pay for qualified medical expenses, including deductibles, coinsurance, and copayments.

Meeting your health insurance deductible is an important milestone, and it can save you a significant amount of money on medical expenses. By understanding how your insurance plan works, you can make informed decisions about your coverage and save money on your healthcare costs. If you have any questions or concerns about your health insurance coverage, don’t hesitate to contact your insurance company or a licensed insurance agent.