Deductible

Deductible is a term used in insurance to refer to the amount of money that the insured must pay out-of-pocket before the health insurer pays its share. Deductibles are typically annual amounts and are part of most health insurance plans in the United States.

Overview

A deductible is a specific dollar amount that your health insurance company may require that you pay out-of-pocket each year before your health insurance plan begins to make payments for claims. Not all health insurance plans require a deductible. As well, not all plans are the same and the amount of deductible can vary.

Types of Deductibles

There are two main types of deductibles in health insurance: embedded deductibles and non-embedded (or aggregate) deductibles.

Embedded Deductibles

An embedded deductible is an individual deductible embedded in a family health insurance policy. This means that if one person in the family reaches their individual deductible, the insurance company will start paying for that individual, even if the family deductible has not been met.

Non-Embedded Deductibles

A non-embedded deductible, also known as an aggregate deductible, is a type of family deductible. In this case, the entire amount of the deductible must be met before the insurance company starts paying for any individual family member.

Impact on Health Insurance Costs

The amount of your deductible is one factor that can affect the cost of your health insurance premium. In general, a higher deductible will result in a lower premium. However, it also means that you will have to pay more out-of-pocket before your insurance coverage kicks in.

See Also

• Health Insurance
• Premium (insurance)
• Copayment
• Out-of-pocket expense

Deductible Resources
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