How much your family pays before your insurance kicks in.
A family deductible is the fixed amount of money you owe each year for your family’s healthcare bills before your health insurance plan begins to pick up the tab. Understanding how much you have to pay out of pocket, meaning the cost of your healthcare for which you are responsible, is very important.
If your insurance plan has a family deductible, you will probably have two types of deductibles. First, each member of your family will have an individual deductible. Together, the family will also have a higher deductible.
Let’s say each member of a family of four each has a $1,000 deductible. Your personal healthcare expenses add up quickly after the plan starts January 1. By May, you have met your deductible, meaning you have spent $1,000 for your own medical bills. For the rest of the year, your insurance will pay your healthcare costs after you pay any copay and coinsurance fees. But you still have to pay if anyone else in your family gets sick or injured.
Now, let’s say your family deductible is $2,000. In August, your son breaks his arm during summer football practice. His medical bill is $1,500. You have already paid $1,000 toward your family deductible because of your personal health problems. Now, you have to pay $1,000 more. Your insurance plan pays the remaining $500. For the rest of the year, your insurance will pay the health bills for everyone in your family, after you pay any copay and coinsurance costs, even though your daughter and wife have not met their personal deductibles.
Most plans will cover some preventive care. That means you will not have to pay anything toward your deductible if you need a cholesterol test, everyone in the family needs a flu shot, or any member of your family needs another pre-determined preventive service, such as screening for colon cancer.
It is very important to understand all of your deductible costs before you sign up for a health insurance plan. If your family visits your doctor often, you might want to choose an insurance plan that has lower individual and family deductibles. If you have lower deductibles, however, your premium (the monthly amount you pay for health insurance) may be higher.
You should always consider all of your family’s anticipated healthcare costs, as well as plan for unanticipated healthcare costs, before choosing a health insurance plan.
June 15, 2015
Christopher Nystuen, MD, MBA