What Does Deductible Does Not Apply Mean

Understanding your out-of-pocket medical costs, including deductibles, is an important part of managing your health-care costs. Here's everything you need to know when it comes to your health insurance deductible and how it works.

How does a health insurance deductible work?

A deductible is a set amount you may be required to pay out of pocket before your plan begins to pay for covered costs. Not every health plan has a deductible, and this amount may vary by plan. Every year, it starts over, and you'll need to reach the deductible again for that year before your plan benefits start. Keep in mind that only what you pay for covered medical costs counts towards your plan's deductible.

Your annual deductible can vary significantly from one health insurance plan to another. Plans with higher metal levels (such as "gold" or "platinum" plans) tend to have lower annual deductibles but higher monthly premiums. Plans with lower metal levels (like "bronze" plans) tend to have lower monthly premiums but higher annual deductibles. The 2019 average deductibles for individual plans dropped 6% from 2018, according to an eHealth study of the 2019 open enrollment.

Here are a couple important things to keep in mind:

All Marketplace plans must cover the full cost of certain preventive benefits even before you've met the deductible. This requirement is mandated by the Affordable Care Act. This might include services like wellness check-ups, vaccinations, or certain preventive screenings. These benefits are covered without cost sharing, even if you haven't met your yearly deductible yet.
Cost sharing amounts like copayments and coinsurance don't usually count towards your deductible. In fact, you generally don't owe copayments or coinsurance until you've met your deductible; that's when your plan starts to cover its share. Before you reach the deductible, you typically pay the entire cost for covered expenses out of pocket.
Family plans may have two deductibles. If your health plan covers you along with other dependents, you may have an individual deductible, which applies to each person, and a family deductible, which applies to the whole family.
Once you've reached your out-of-pocket maximum, your plan covers 100% of costs for the rest of the year. Some plans may have an annual cap on covered medical costs, known as your maximum out-of-pocket. This is separate from your deductible, and usually a higher amount. Once you reach this amount, your insurance will pick up the entire bill for all other covered care for that year.

Should I have a high or low deductible?

As mentioned, the health insurance deductible may vary from plan to plan. It's important to take your time to compare plans side by side, since higher plan deductible may be offset by lower cost sharing or premiums, and vice versa. Some plans (typically HMOs) may not have a deductible at all. These plans are referred to as zero-deductible plans. Zero-deductible plans typically come with higher premiums while high-deductible plans typically come with lower premiums.

If you frequently visit doctors or take multiple medications, a zero-deductible plan may suit your budget and coverage needs. If, on the other hand, you're generally healthy and don't use medical services often, you may find you're unlikely to reach your plan's deductible every year. In that case, it may make more sense to find a plan with a higher deductible if it's offset by lower monthly premiums. You may find you end up paying less overall this way.

eHealth offers a wide range of individual and family health insurance plans for a variety of budgets and needs. Our plan finder tool makes it easy to browse and compare plan options. Remember, health insurance costs are regulated, so you'll never pay more at eHealth than you would elsewhere.

High deductible plans and Health Savings Accounts (HSAs)

Another option to consider are high-deductible plans, which usually have low monthly premiums. These plans may appeal to you if you're generally healthy, don't anticipate getting sick, and don't visit the doctor often or take many prescription drugs.

While low premiums may seem initially appealing, it's important to consider the amount of health care services you may need in the upcoming year both for yourself and any dependents you may have. If you do opt for a high-deductible plan, you may be eligible for a Health Savings Account (HSA). An HSA allows both you and your employers to deposit a limited amount of pre-tax dollars into this account for medical expenses. These plans usually have a high deductible amount you must meet before benefits kick in.

What does "no charge after deductible" mean?

This means that once you have paid your deductible for the year, your insurance benefits will kick in, and the plan pays 100% of covered medical costs for the rest of the year. After you've reached this limit, you will not have copayments, coinsurance, or other out-of-pocket costs.

In most health insurance plans, the health insurance carrier (also called provider or company) usually only pays 100% of covered medical costs once you've reached your out-of-pocket maximum. This threshold is a similar idea to your deductible, except usually higher — meaning you have to spend more money on covered medical costs before reaching it.

Watch our video on deductibles

Review the infographic below for more information on deductibles

Be aware that copayments typically do not count towards your deductible, however they do typically count toward your out-of-pocket expenses.
Once you've reached your out-of-pocket maximum, your insurance will pick up the entire bill for any other covered care you receive in that year.

How should I choose a health insurance deductible?

Every person's situation is different, and what works for your needs will depend on your health needs, budget, and more. As you're considering your options, it's important to take the time to shop around and compare costs. As mentioned, deductibles and other out-of-pocket costs may vary quite a bit from plan to plan. Comparing costs is easy and could save you money.

If you're interested, an eHealth licensed insurance agent would be happy to walk you through your options to find a health plan that might fit your needs. You can also start shopping on eHealth at your own convenience and compare all health insurance options in your state!

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Source: https://www.ehealthinsurance.com/resources/affordable-care-act/deductible-insurance

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What Does Deductible Does Not Apply Mean