What is a deductible for health insurance?

At the start of the year, you’ll pay the full amount for covered services, which will count towards your insurance deductible for the year. After you’ve hit your insurance deductible, your health insurance company will partially pay for covered services for the remaining plan year. Each plan year, the deductible will reset.

How does a health insurance deductible work?

At the start of the year, you’ll pay the full amount for covered services, which will count towards your insurance deductible for the year. After you’ve hit your insurance deductible, your health insurance company will partially pay for covered services for the remaining plan year. At the start of each plan year, the deductible will reset. 

What is a high deductible health plan? 

Some health insurance companies offer a high deductible health plan. This means the insurance deductible you have to reach is higher. The benefit of a high deductible health plan is your monthly insurance premium, the amount you pay for your health insurance, is lower. However, the drawback is you’ll have to pay more out of pocket before your health insurance company starts to pay some amount for covered services. 

Deductible vs. out-of-pocket maximum 

An out-of-pocket maximum refers to how much you would pay for covered services before your insurance plan covers the full cost in a plan year. The difference between an out-of-pocket maximum and a deductible is that after you reach the cap on your deductible your insurance only partially covers the cost of covered services. Whereas, with an out-of-pocket maximum, your insurance covers the full cost of covered services after reaching the cap.