What Is a Health Care Deductible?

Health care deductibles represent the amount you must pay out-of-pocket before your insurance company begins covering some costs for you. Understanding your deductible can have both financial and healthcare repercussions for you.

Reaching your deductible can mark an important step on your healthcare journey. When you meet it, cost-sharing expenses such as copayments and coinsurance decrease, while coverage values grow. Here we discuss how deductibles work along with essential information you should know about health insurance deductibles.

A deductible is the annual payment required before health insurance starts covering part of healthcare costs covered by your policy. Please keep in mind that this deductible only applies to services covered under your specific plan and not all forms of care provided under it.

Deductibles and copayments can often be confused, with copayments representing flat amounts that must be paid towards certain services and prescriptions. While both payments apply towards your annual deductible, copayments do not count towards reaching your out-of-pocket maximum until your deductible has been met.

Many people opt for plans with higher deductibles to save on monthly premiums, but it is essential to take all costs into account when making this choice. While a higher deductible may require upfront expenses, you could offset these by saving money through an HSA (Health Savings Account).

Once you meet your deductible, your payments will depend on the coinsurance rate of your health insurance plan. For instance, Ben and his family have an 80/20 coinsurance rate which means once they reach their deductible the health insurance company will cover 80 percent of any in-network healthcare costs until next year.

Ben’s daughter fell at a playground and broke her arm, necessitating a trip to see a neurologist – which may prove costly. To ensure she receives healthcare she requires, they first needed to meet their deductible; now that this has been accomplished they only bear 20% of the total bill.

Importantly, your deductible resets each year – unlike premiums which don’t change. To learn more about your deductible and benefits, log in to Blue Access for MembersSM; your deductible can be seen under Spending in Blue Access for MembersSM; for any questions contact one of their BAMSM customer service representatives.

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