Health Insurance Blog

Question #79 What is a deductible?

Posted by:
Tim Jackson
on
September 12, 2015
What is a deductible?

What is a deductible?  What is the difference between deductible and out of pocket? Do I want a high deductible or a low deductible?

A deductible is the amount of money that you need to pay before the insurance company will begin to pay. An out of pocket maximum is the the most money that you will have to pay for covered medical expenses before your insurance will pay the full amount of your covered medical expenses.  This includes your deductibles, co-pays, co-insurance.  So your deductible is included in your out of pocket maximum.

When deciding whether to get a high deductible or low deductible the main thing to take into consideration is the price.  A high deductible plan costs less than a low deductible plan. So the higher the deductible the lower the premium.  However, if you know you will reach above your deductible price long before the year is over, it may be worth it to go with a lower deductible or out of pocket max because your insurance company will help cover extreme health care costs.  But you will have to weigh out if it is worth paying more per month for your insurance.

This blog was written by Katharine Bristow, a Health Insurance Specialist.

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