In insurance, a deductible is the amount that you (the insured) are responsible for FIRST before the insurance company starts paying toward your covered care. Deductibles for all ACA individual insurance and most (but not all) employer group insurance are tracked by calendar year, regardless of when your coverage started. For example, if your insurance has a $2,000 deductible, then the first $2,000 of medical claims you incur during a calendar year are your responsibility; your insurance won’t begin paying toward your covered claims until after you’ve met your deductible.
Many insurance plans include a “deductible waiver” for office visit and/or prescription drug copays. On these plans, you pay for a flat dollar amount for an office visit, even if you haven’t met your annual deductible yet. If you have this kind of coverage, your deductible only applies to claims other than office visits or prescriptions (e.g., major testing, surgery or hospital visits, etc.). There are also insurance plans which have a separate, smaller annual deductible (for instance, $500) for prescriptions, and there are less expensive plans which have a larger deductible up front which applies to everything, office visits and prescriptions included; if you have one of these plans (called a “high-deductible health plan” or HDHP), your insurance doesn’t pay anything until after that deductible is met in full.
If your insurance also covers your spouse or children, you will have a SINGLE deductible as well as a FAMILY deductible (typically twice the amount of the single deductible). This means that, if the claims for everyone in the family meet the amount of the family deductible, the deductibles for all family members are considered met, even if individual family members haven’t met their single deductibles.
EXAMPLE:
A family of four has an insurance plan with a $2,000 single/$4,000 family deductible. One family member has surgery that costs $2,000, meeting his individual deductible. Two family members then break limbs, and their care costs $1,000 each. Even though only one individual has met his single deductible of $2,000, the deductible is met for the entire family because they have paid $4,000 in total.
Some people have a hard time remembering that deductibles are not per incident. It doesn’t matter how many separate medical claims you incur; once you meet your deductible, it’s met for all further covered medical claims for that calendar year.
(Note: Because of provisions in the Affordable Care Act, practically all medical insurance plans include a set list of preventive care services – well-baby checkups, annual physicals, OB/GYN visits, etc. – at no cost to you, no matter what your deductible is. Deductibles and the other provisions mentioned above are for services and visits other than those preventive care services.)
