Average Deductible for Health Insurance

Health insurance is an important benefit that provides individuals with the necessary financial assistance to cover for their medical expenses. However, there are several factors that come into play when it comes to choosing the right health insurance plan, and one of those factors is the deductible.

What Is a Deductible?

A deductible is the amount of money that an individual must pay out-of-pocket before their health insurance plan kicks in and starts covering their medical expenses. Deductibles vary from plan to plan, and it is important to understand the average deductible for health insurance in order to make an informed decision when choosing a plan.

What Are the Different Types of Deductibles?

There are different types of deductibles that individuals can choose from when selecting a health insurance plan. The most common types of deductibles include:

What Is the Average Deductible for Health Insurance?

The average deductible for health insurance varies depending on the type of plan an individual selects. According to a study conducted by the Kaiser Family Foundation, the average deductible for single coverage plans in 2020 was $1,644, while the average deductible for family coverage was $4,166.

Why Are Deductibles Important?

Deductibles are important because they help to lower the monthly premium costs of a health insurance plan. The higher the deductible, the lower the monthly premium cost will be. However, it is important to choose a deductible that an individual or family can afford to pay out-of-pocket if they need medical care.

How to Choose the Right Deductible?

Choosing the right deductible can be a difficult decision, but there are a few factors to consider when making this decision. These factors include:

1. Health Care Needs

Individuals should consider their healthcare needs when selecting a deductible. If an individual has a chronic condition that requires frequent medical care, they may want to choose a lower deductible to minimize their out-of-pocket costs.

2. Monthly Budget

Individuals should also consider their monthly budget when selecting a deductible. A higher deductible will result in lower monthly premium costs, but individuals should make sure that they can afford to pay the deductible if they need medical care.

3. Out-of-Pocket Maximum

Individuals should also check the out-of-pocket maximum for a health insurance plan when selecting a deductible. The out-of-pocket maximum is the maximum amount an individual or family will have to pay out-of-pocket during a plan year. If an individual or family reaches the out-of-pocket maximum, the health insurance plan will cover the remaining expenses.

FAQ

1. What is the difference between a deductible and an out-of-pocket maximum?

A deductible is the amount of money an individual or family must pay out-of-pocket before their health insurance plan starts covering their medical expenses, while an out-of-pocket maximum is the maximum amount an individual or family will have to pay out-of-pocket during a plan year.

2. Can I change my deductible?

If an individual or family is enrolled in a health insurance plan through their employer, they may only be able to change their deductible during the open enrollment period. If an individual or family is enrolled in a plan through the Affordable Care Act (ACA) marketplace, they can change their deductible during the annual open enrollment period or during a special enrollment period.

3. Is it better to have a high or low deductible?

The answer to this question depends on an individual’s or family’s healthcare needs and budget. A higher deductible will result in lower monthly premium costs, but individuals should make sure that they can afford to pay the deductible if they need medical care. A lower deductible will result in higher monthly premium costs, but individuals may have a lower out-of-pocket cost if they need medical care.

4. How does a deductible work with coinsurance?

Coinsurance is the percentage of the cost of a covered medical expense that an individual or family must pay after they have met their deductible. For example, if an individual has a 10% coinsurance and their medical expense is $1,000, they would have to pay $100 after they have met their deductible.

5. What happens if I don’t meet my deductible during a plan year?

If an individual or family does not meet their deductible during a plan year, they will have to pay for their medical expenses out-of-pocket until they meet their deductible. Once they meet their deductible, their health insurance plan will start covering their medical expenses.

Overall, it is important to understand the average deductible for health insurance and the factors to consider when selecting a deductible to ensure that individuals and families can afford to pay for their medical expenses.