What Is a Deductible?A deductible is the amount you pay out of pocket for covered medical services before your health insurance plan begins to cover its share of the expenses. Your deductible amount will depend on the type of plan you enroll in.
How Do Deductibles Work?Deductibles are a staple in most health insurance plans, and how much you pay toward your deductible varies by plan.
As soon as you pay the total amount of your deductible, your health plan will start paying its portion of covered services.
The Difference Between Deductibles and Other Out-of-Pocket Expenses
In addition to deductibles, there may be other out-of-pocket expenses you could be responsible for paying, depending on your health insurance plan. Out-of-pocket expenses can include deductibles, coinsurance, and copays.
Coinsurance is the percentage your health insurance company may require you to pay for a covered health care service after you pay your deductible. Depending on your policy, that could mean 20%.2 For example, this means that a $100 office visit will cost you $20 once you’ve met your deductible.2
A copayment, or copay, is a set amount that you pay for covered health care services after you have paid your deductible. For example, if your copay for an office visit is $20, you pay your $20 copay during your visit instead of the full $100.3
In short, your coinsurance, or cost-sharing, begins after you’ve met your policy’s deductible amount. A copayment is a predetermined cost for particular health care services that is required at the time you receive care.
High-Deductible vs. Low-Deductible Health Plans
While most health insurance plans include a deductible, your deductible amount can vary. Generally, there are two types of plans: High-Deductible Health Plans(HDHP) and Low-Deductible Health Plans (LDHP).
A high-deductible health plan (HDHP) is health coverage with a higher deductible but a lower monthly premium. As of 2021, a HDHP is any plan with a deductible of $1,400 for an individual or $2,800 for a family.4
HDHPs can be used with a Health Savings Account (HSA), which lets you save money, tax-free, to cover your medical expenses.
Because HDHP monthly premiums are typically low, it can be beneficial for individuals who are generally healthy and don’t need to visit a doctor except for annual exams or preventive care.
Under the Affordable Care Act (ACA), HDHPs can include many preventive care services that won’t require paying toward your deductible. These preventive services include (but are not limited to):
- Abdominal aortic aneurysm screening
- Alcohol misuse screening and counseling
- Aspirin use
- Blood pressure screening
- Cholesterol screening
- Colorectal cancer screening
- Depression screening
- Type 2 diabetes screening
- Diet counseling
- HIV screening
- Immunization vaccines
- Obesity screening and counseling
- Sexually Transmitted Infection (STI) prevention counseling
- Tobacco use screening and cessation interventions
- Syphilis screening
On the other hand, a low-deductible health plan (LDHP) can be beneficial for individuals and families who need to frequently or routinely visit doctors, specialists, and hospitals for care.
In short, if you’re looking to keep your monthly premiums low, you may opt for an HDHP. However, if you and your family require frequent, expensive health care services, an LDHP may be more suitable for your budget.
No matter which type of plan you’re interested in, HealthMarkets can help you find the right one for your loved ones. Compare plans online and review your options.
Lower Your Healthcare Costs with Subsidies
No matter how high or low your health policy’s deductible is, having the option to lower how much you pay out of pocket can help out any family’s budget. For low-income families, you may be eligible for a health insurance subsidy to help lower the cost of your monthly premiums or out-of-pocket expenses, including your deductible. These subsidies are only available for Affordable Care Act (ACA) plans.
And with the 2021 American Rescue Plan Act now in effect, you could be eligible for a zero-premium silver or bronze plan thanks to expanded eligibility requirements.5
- You can have this credit paid to your insurance company from the federal government to help lower or cover the cost of your monthly premiums; or
- You can claim the entire amount of credit you’re eligible for in your annual tax return.
In order to be eligible for this tax credit, you must meet these requirements:6
- You must have a combined annual household income between 100% and 400% of the Federal Poverty Line.
- You must not be eligible for Medicaid, Medicare, CHIP, or TRICARE.
- You cannot have access to affordable coverage through your employer’s plan.
- You must not be claimed as a dependent by another person.
The Cost-Sharing Reduction is an additional subsidy that helps families making a modest income afford out-of-pocket expenses when receiving health care. This means that when you go for a health service, you can have the amount you must pay in deductibles, copay, or coinsurance lowered or covered.
In order to be eligible for this reduction, you must meet these requirements:
- You must have a combined annual household income between 100 percent and 250 percent of the Federal Poverty Line.
- You must be enrolled in a Silver-tiered health plan.
Want to see if you’re qualified for a health insurance subsidy? Get a quote with HealthMarkets, at no cost to you, and see if your family meets the requirements for lower monthly premiums, lower out-of-pocket costs, or even $0 monthly premiums.
Consider Deductibles When Shopping for Health Insurance
Before enrolling in coverage, get a quote from HealthMarkets. HealthMarkets can help you compare health plans that fit your unique needs – all at no cost to you.
Start comparing your options today.
1.“Deductible.” HealthCare.gov. Retrieved from https://www.healthcare.gov/glossary/deductible/. Accessed May 19, 2021.
2.“Coinsurance.” HealthCare.gov. Retrieved from https://www.healthcare.gov/glossary/co-insurance/. Accessed May 19, 2021.
3.“Copayment.” HealthCare.gov. Retrieved from https://www.healthcare.gov/glossary/co-payment/. Accessed May 19, 2021.
4.“High Deductible Health Plans (HDHPs) & Health Savings Accounts (HSAs).” HealthCare.gov. Retrieved from https://www.healthcare.gov/high-deductible-health-plan/. Accessed May 19, 2021.
5.“How the American Rescue Plan Act Affects Subsidies for Marketplace Shoppers and People Who Are Uninsured.” KFF. March 2021. Retrieved from https://www.kff.org/health-reform/issue-brief/how-the-american-rescue-plan-act-affects-subsidies-for-marketplace-shoppers-and-people-who-are-uninsured/
6.“Premium Tax Credit.” HealthCare.gov. Retrieved from https://www.healthcare.gov/glossary/premium-tax-credit/. Accessed May 19, 2021.
7.“Explaining Health Care Reform: Questions About Health Insurance Subsidies.” KFF. October 2020. Retrieved from https://www.kff.org/health-reform/issue-brief/explaining-health-care-reform-questions-about-health-insurance-subsidies/
Those with incomes between 100% and 150% of the federal poverty level (FPL) may qualify for a zero-dollar premium silver plan (after tax credits). They may also qualify for a zero-dollar premium bronze plan (after tax credits). Cost sharing (deductibles and coinsurance) may vary.