A health insurance deductible is the amount you pay out of pocket for covered medical services before your insurance plan starts paying its share. If your deductible is $2,000, you pay the first $2,000 of covered costs yourself. After that, the plan kicks in with coinsurance (typically 70-80% plan, 20-30% you) until you reach your out-of-pocket maximum.
For employers designing group health plans, the deductible level is one of the biggest levers for controlling premium costs while keeping employees engaged in their care decisions. For businesses managing multiple insurance lines including SBA hazard insurance on financed property, the health plan deductible is one component of the total cost of risk.
Key Takeaways
- What it is: The amount you pay before insurance covers costs
- Typical amounts: $500 to $2,000 for group plans; $2,000 to $8,000+ for individual/HDHP
- Higher deductible = lower premium: The tradeoff is more out-of-pocket risk per claim
- HDHP + HSA: High-deductible plans paired with Health Savings Accounts offer tax advantages
- Preventive care: ACA requires plans to cover preventive services before the deductible
Disclaimer: This article is for informational purposes only. Consult our licensed advisors for guidance specific to your situation.
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