A deductible in health insurance is the amount of money you must pay out of your own pocket for covered medical expenses before your insurance plan starts to pay. For example, if your deductible is $2,000, you need to pay the first $2,000 of your medical bills yourself each year before the insurance company begins to cover most costs. Once you meet your deductible, your plan will pay the majority of your covered care costs, and you'll typically only pay coinsurance or copayments until you reach your out-of-pocket maximum. Key points about deductibles in health insurance:
- It is a fixed amount you pay annually before the insurer pays.
- Preventive services and some medications may still be covered even before the deductible is met.
- There are different types of deductibles:
- Compulsory (mandatory fixed by insurer)
- Voluntary (you choose to pay more upfront to lower premiums)
- Comprehensive and non-comprehensive deductibles (vary by coverage scope).
- Paying a higher deductible generally lowers your premium since you take on more initial cost risk.
- The deductible resets every policy period, usually annually.
In sum, the deductible is a cost-sharing feature that helps ensure you pay a portion of your medical expenses first, encouraging responsible use of care while mitigating insurance fraud or frivolous claims.
