What is a Health Insurance Deductible?
A health insurance deductible is the amount you pay before your insurance kicks in. For example, if you have a $1000 deductible, and you need a $1000 MRI procedure and a $2000 surgery, you will pay $1000 out-of-pocket for the MRI, and then $0 for the surgery.
How do deductibles impact your costs?
A health plan with a lower deductible generally carries a higher monthly payment, and vice versa.
If you prefer to pay a higher amount monthly for the security and predictability of low out-of-pocket expenses for high-cost medical care, you may want a low deductible in your healthcare plan. This can be a good option if you have a chronic health condition or high risk of sports injuries.
If you prefer a high one-time expense in the event you need high-cost medical care rather than a smaller monthly payment, a high deductible health plan may be the right choice for you. This can be a good option if you are younger and generally healthy, or if you have a health savings account (HSA), which you can use to pay your deductible with money that is not taxed as income. You may also have a health reimbursement account (HRA) through your employer that can pay your deductible, which can also make a high deductible health plan an advantageous choice.