Make Your Deductible Work For You

Your deductible is the amount you pay for covered health care services before your insurance plan starts to pay. Plans with higher deductibles have lower premiums. That means you’ll be responsible for paying for more of your care, but it also means your monthly costs for coverage are lower.

Deductibles can range from a few hundred dollars to several thousand. When you’re looking at plans, pay attention to the medical services covered without paying toward your deductible. Many health insurance plans will cover routine and preventive care Preventive care is medical care that aims to prevent serious diseases and injuries. These include immunizations, physicals, screenings, and more. , and only require you to make a small copayment.

Your deductible ^[i] is simply the amount you pay for covered health care services before your insurance plan starts to pay. If your deductible is $3,500, you pay the first $3,500 worth of covered services for yourself. After you pay your deductible, you typically pay a copayment or a coinsurance depending on how your plan is structured. Your insurance company pays the rest.

No matter what your deductible is — there’s a little bit of a strategy involved to get your deductible working for you. We’ve listed some below.

• If you reach your deductible at any point in the plan year, take advantage of it! Why? Because once you hit your deductible, your out-of-pocket expenses for the remainder of your plan year essentially give you the best “deals.”
• Don’t put off health care services if you need them. If you reach the deductible early in the year, you receive the highest health insurance coverage for the remainder of the year for services. (This may not pertain to individuals with a high deductible.)
• If you are on a High Deductible Plan (HDHP), consider opening a Health Savings Account (HSA) at the beginning of the year. The more funds that you put in the HSA earlier in the year, the more interest will collect in the account. Your HSA can be used to pay toward your deductible.
• Be smart about where you go for medical services. If you need to meet a hospital deductible, visit a hospital for imaging services rather than an imaging center. Keep in mind that this doesn’t mean you should go to the hospital when you could simply visit your physician.
• Know the difference between a family deductible and an individual deductible. You may need to hit the individual deductible and the family deductible with a family health insurance plan before health insurance coverage kicks in.
• Don’t forget about the deductible credit. Some health insurance plans include a deductible credit, giving you credit for money you’ve already paid toward your deductible if you switch health plans mid-year. It’s critical to confirm whether or not your plan offers this before signing up for coverage.