After you pay your annual deductible, your insurance starts paying its portion of the cost of covered care you receive for the rest of the year. Depending on the service, the health care provider, and your insurance, your portion of the cost of care covered by the plan after you’ve met your deductible may be a copayment or coinsurance amount.

Understanding deductibles and how they work

In this section, we’ll delve into the concept of deductibles, a key element of insurance policies, to help you understand how they work and impact your coverage.

What is a health insurance deductible?

Your deductible is the amount of money you pay out-of-pocket for covered health care services before your insurance company pays anything. There is a caveat. Thanks to the Affordable Care Act (also known as the ACA or Obamacare), certain preventive services usually are not subject to a deductible. The insurance company typically pays the full cost of preventive services, such as certain screenings to detect cancer, wellness visits, and immunizations.

The average deductible for 2024 is $3,057, a reduction compared to the 2023 average of $3,134.

How does the deductible amount affect coverage?

Health plans may have a deductible that must be met before the insurance pays anything. Many plans, however, assign a deductible to categories of covered services.

For example, a health plan may apply a deductible for covered inpatient and outpatient hospital services. Doctor visits, however, may be exempt from the plan’s deductible. Instead of a deductible, your cost-share amount might be a flat dollar amount, such as a $30 copayment for each office visit. In this example, if you have a $2,000 annual deductible, you will pay 100% of the cost for care you receive in a hospital inpatient or outpatient setting up to $2,000. After you reach the $2,000 threshold, your health plan pays its share of the cost for inpatient or outpatient care.

When does your deductible reset?

The deductible for your insurance will reset on the first day of the calendar year—January 1st. While every individual and family insurance plan is different, this reset date is more or less standard for all insurance plans. Once this deductible resets, families will need to pay out-of-pocket expenses again until they meet their deductible.

Costs that count toward your deductible

Although health insurance plans vary in how they set up their deductibles, it is common to see certain out-of-pocket costs help meet the plan deductible while other costs rarely, if ever, do.

Costs that typically count toward deductible	Costs that don’t count toward deductible
Hospitalizations	Copayments (typically)
Surgeries	Premiums
Lab Tests	Cost for services not covered by your plan
MRIs and CAT Scans
Anesthesia
Doctor and therapist visits not covered by a copay
Medical devices such as pacemakers
Medical equipment such as wheelchairs

Steps to take after meeting your deductible

Fortunately, once you’ve met your deductible, you can now start taking advantage of free or low-cost services.

Below are some of the best things to do once you’ve met your deductible since the cost for these activities and services can now be fully covered by health insurance.

1. Fill your prescriptions. Once you’ve met your deductible, it’s a good idea to fill your prescriptions for the year, if possible. This is because prescription drug costs can add up quickly. Most doctors will allow you to fulfill your medication months ahead of time. Ask them if this is safe to do, as some medications might be strictly controlled. Filling your prescriptions ahead of time can help you have medication in case of an emergency, in case you lose coverage, or if you expect to have to switch to short-term health insurance soon and aren’t sure when you’ll be on a steady plan again.
2. Complete your annual physical. Your annual physical is important to give doctors an inside look at your health and to catch possible issues before they get worse. Your annual physical will involve lab work and a doctor’s visit, so it’s best to conduct your physical exam once you’ve already met your deductible to save money.
3. Get in with specialists. If you think you’re suffering from an illness that might require care from a specialist, such as a neurologist or physical therapist, you may want to get on top of scheduling these visits once you’ve met your deductible. Specialists are quite costly since they might require more tests, in-depth procedures, and other specialized medical care to treat your condition. Fortunately, once your deductible for insurance is met, you can get help from a specialist without worrying about additional financial stress.
4. Schedule testing, screenings, and lab work. Testing and lab work is a regular part of healthcare, whether it’s for preventative reasons or because your doctor might suspect you have a health issue. In addition to specialists, you might also need testing such as bloodwork, ultrasounds, or X-rays for certain conditions. You should schedule any screenings, lab work, and blood work after your deductible is met, as this can help offset the cost of special tests.

While these are all ways to take advantage of meeting your deductible, it’s important to note that you shouldn’t put off essential health care or diagnostic needs if you don’t have to.

What happens when you meet your deductible?

Meeting your deductible can be a significant milestone in your healthcare journey, as it marks a shift in how your health insurance coverage works. Understanding what happens when you meet your deductible is crucial, as it can have both financial and healthcare implications. In this section, we will explore the benefits, considerations, and changes to both costs and coverage that you’ll have to navigate once you reach your deductible threshold.

How meeting the deductible affects co-insurance

Co-insurance is a critical aspect of your health insurance plan, and it plays a significant role once you’ve met your deductible. Essentially, co-insurance is the portion of the cost of a covered healthcare service that you are responsible for, and it comes into play after you’ve reached your deductible. It’s typically expressed as a percentage of the approved medical expense.

For instance, let’s say you have a healthcare service or procedure that costs $1,000, and your insurance plan has a 20% co-insurance rate. Once you’ve met your deductible, you would be responsible for paying 20% of the cost, which in this case would be $200. Your insurance company would then cover the remaining 80%, which is $800. This sharing of costs between you and your insurance provider is a fundamental principle of many health insurance plans.

It’s important to note that the specific co-insurance rates and the services they apply to can vary depending on your insurance plan. Some plans may have fixed co-insurance percentages for all services, while others might differentiate between in-network and out-of-network providers. Understanding the co-insurance structure of your plan is essential to manage your healthcare expenses effectively once you’ve met your deductible. Additionally, keep in mind that co-insurance often continues until you reach your plan’s out-of-pocket maximum, after which your insurance plan typically covers 100% of covered services, giving you greater financial protection.

Changes in out-of-pocket expenses

Every year an out-of-pocket maximum is placed on both individual and family plans. This is the most you have to pay out-of-pocket for covered services during that plan year. After you spend this pre-determined amount of money on deductibles, copays, and coinsurance, your health insurance plan pays 100% of the cost of covered benefits. Keep in mind that an out-of-pocket maximum does not include your monthly premiums. It also doesn’t include any money you pay out-of-pocket for non-covered services.

Impact on monthly premium costs

Meeting your deductible can have an impact on your monthly premium costs, although the premiums themselves remain constant. Typically, health insurance plans with lower monthly premiums tend to have higher deductibles, while those with higher premiums often come with lower deductibles. When you reach your deductible, your monthly premiums won’t change, as they are a fixed cost. However, the significance lies in the trade-off between premiums and deductibles. Meeting your deductible signals a shift in how your healthcare expenses are distributed. While you continue to pay your regular monthly premium, you’ll likely experience a reduction in out-of-pocket costs for covered medical services. This is because, once the deductible is met, your insurance plan starts shouldering a more substantial portion of the expenses. Striking the right balance between premiums and deductibles is a critical consideration when choosing a health insurance plan, allowing you to effectively manage your overall healthcare costs.

Services covered at full or partial cost

Once you’ve met your deductible, a significant shift occurs in your health insurance coverage, impacting the way various medical services are handled. At this point, certain services may be covered at full cost, while others might still require partial payments or co-payments. Services that fall under the “covered at full cost” category typically include preventive care and essential services, such as annual check-ups and vaccinations. These are often fully covered by your insurance provider, meaning you won’t have to pay anything out of pocket. On the other hand, there are services categorized as “partially covered,” which may require you to share some of the costs with your insurance company through co-payments. These co-payment details can vary, depending on your specific plan and the type of service received. Understanding these distinctions is crucial, as it allows you to make informed decisions about your healthcare, helping you manage expenses effectively while receiving the necessary medical care.

Finding the right health insurance plan

Now that you know the basic principles around what happens when you meet your deductible, you are well-equipped to navigate the complexities of health insurance and make informed decisions about your healthcare coverage. It’s important to consider your specific healthcare needs, budget, and risk tolerance when choosing between high or low deductible plans.

The next step is to weigh the advantages and disadvantages of each option, taking into account factors such as your overall health, the frequency of medical services you anticipate needing, and your ability to cover higher upfront costs. By carefully evaluating these factors, you can determine whether a high or low deductible plan is the right choice for you and your family. eHealth is here to assist you in this decision-making process, offering a range of affordable coverage options tailored to your individual needs and preferences.

Should you choose a high or low deductible plan?

Often people are attracted to the high-deductible plans initially because they tend to have low premiums. However, low premiums don’t always make them the most cost-effective choice. High-deductible plans are most suitable for people who are generally healthy and don’t expect to need many health care services during the plan year.

Low-deductible plan premiums may seem expensive at first glance. However, if you expect to receive medical care throughout the year, have a chronic illness, or dependents, you may find that a plan with a lower deductible would better suit your health coverage needs and budget.

eHealth offers plans with high and low deductibles. There are some plans – typically HMOs – that don’t have deductibles at all. Learn more about individual and family coverage with eHealth and find a plan that works for you. An eHealth team of knowledgeable insurance brokers and service representatives is standing ready to help you. Also check out health insurance by state to see the best plans in your area.

FAQs about what happens when you meet your deductible

How long does it take to meet your deductible?

The length of time to pay your deductible for insurance will vary based on the amount of your deductible and how much you spend at a doctor’s visit, among other factors. For example, if your deductible is $1,000, it might take you several months’ worth of doctor’s visits and tests to meet your deductible. However, you might meet this deductible in a single day or week if you are involved in an accident and hospitalized.

What happens if you don’t meet your deductible?

If you do not meet the deductible in your plan, your insurance will not pay for your medical expenses—specifically those that are subject to the deductible—until this deductible is reached. For instance, if your deductible is $2,000 and you have an ER visit that costs $700, insurance will not pay for this $700 until you meet your $2,000 deductible.

For some, it is worthwhile to find plans that have lower deductibles, which might be more expensive monthly but can help cover medical costs with fewer out-of-pocket expenses.

What do you pay after your deductible is met?

After your deductible is met, you will still need to pay other fees such as co-payments. For instance, if your doctor has a co-payment of $30 per doctor visit, you will still need to pay this co-payment even after your deductible for insurance is met. You will also need to pay for medical services if you use a provider or specialist outside of your network.

How does a family plan deductible differ from an individual plan deductible?

Along with individual deductibles, many family health insurance plans also include a family deductible. The family deductible can vary depending on the plan you choose, but it’s often equivalent to about 2 or 2.5 times the amount of an individual deductible. When you or a covered member of your family meets the individual deductible, that money also applies to the family deductible.

Understanding the basics of your health care cost-share

At eHealth, we understand how important it is to you to know how your health insurance plan works so that you can anticipate how much you will pay for health care and how much of the cost your health plan will cover. We realize that understanding health insurance can be daunting. But by knowing a few key terms, you’ll be prepared to evaluate your current health insurance coverage and compare it to the health coverage options you have. Deductibles, co-payments, coinsurance, and out-of-pocket maximums are terms you’ll want to understand.

If you’d like to compare available health insurance plans in your area, let eHealth help you navigate your individual and family health insurance options.

Learn more about what happens when you meet your deductible

Once you meet your deductible, you’ve essentially covered your share of healthcare costs to a set limit, prompting your insurance to take over and cover more substantial portions of your subsequent medical bills. To deepen your understanding of deductibles and other healthcare expenses, eHealth offers detailed resources and guidance from licensed insurance agents to help you navigate these financial aspects effectively.

Learn more about deductibles and get personalized advice tailored to your needs.

This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.