What is a Health Insurance Deductible?
A deductible in health insurance or Medicare is the amount that you must pay for covered health services before your plan begins to pay. This amount can vary widely depending on the type of plan you have.
Health insurance deductibles can vary widely from $0 up to several thousand dollars annually. Here are a few important questions to consider surrounding the deductible when shopping for health insurance plans…
- Is the deductible per person or per family?
- Is there a limit to the number of deductibles you need to meet per plan? (For example, 3 deductibles on a family plan.)
- When does the deductible reset? (Most plans reset January 1, but some private plans reset on the anniversary date of the plan start.)
- Are there any services I can receive that are not subject to the deductible? (Some health insurance plans will offer copays for office visits or other services that you can utilize before you hit your deductible.)
Does Medicare Have a Deductible?
Medicare is a little different when it comes to deductibles. You may or may not have a deductible, depending on the type of plan you have.
Medicare Part A Deductible
For Medicare Part A, your deductible is $1556 per benefit period (2022). There are no limits to benefit periods annually, which means you may have to pay this deductible more than once.
Medicare Part B Deductible
If you have Part B, your deductible is $233 per year (2022). You will have to pay this deductible before your Part B coverage begins each year. It will reset every January 1, no matter when you signed up for Part B.
Medicare Advantage Deductible
Your Medicare Advantage plan may or may not have a deductible for medical services or prescription drugs. Refer to the Evidence of Coverage or Summary of Benefits for your plan to determine your annual deductibles. These documents are available on your plan’s website, or you can request them by calling the number on the back of your ID card.
Medicare Prescription Drug Plan Deductible
Medicare prescription drug plans are much like Medicare Advantage plans in that they may or may not have an annual deductible. Refer to the Evidence of Coverage or Summary of Benefits for your plan to determine your annual deductible.
Medicare Supplement Deductible
Whether or not you have a deductible on your Medicare Supplement will be determined by your plan type. All Medicare supplement plans pay for the Part A deductible, except for Plan A.
All plans except for Plan F and C require you to pay the Part B deductible.
(NOTE: Those that are new to Medicare after January 1, 2020 can no longer purchase Plan F or Plan C. If you qualified for Medicare before January 1, 2020 and did not enroll may be able to purchase a Plan F or Plan C. Those that are enrolled in a Plan F or C may keep their plan.)
What is an Out-of-Pocket Max in Health Insurance?
The out-of-pocket max is the most you will have to pay out-of-pocket for covered health services, usually on an annual basis. With health insurance, there is usually an individual and a family out-of-pocket maximum. Once you hit the maximum, your plan will pay covered health expenses 100%.
Affordable Care Act compliant plans (like those on Healthcare.gov) are required to pay for all services over the out-of-pocket maximum with no limit.
Some private plans will have a plan maximum (usually $1 million or greater). That is the most the plan will pay for covered services above the out-of-pocket maximum.
What is the Out-of-Pocket Maximum for Medicare?
The only type of plan where there is an out-of-pocket maximum in Medicare is a Medicare Advantage plan. The out-of-pocket maximum will vary by plan and even by zip code.
Medicare Part A, Part B, and prescription drug plans have no out-of-pocket maximum. This is critical to remember when considering Medicare coverage and why supplement plans can play an important role in controlling your costs.
If you still have questions regarding the deductible or out-of-pocket maximum on your plan, we would be happy to help you! Feel free to reach out any time for a no-cost review of your health insurance or Medicare plan. It is our policy to ensure you are on the best plan for you, even if that means keeping you on your current plan. Call us at 615-919-1009 for your appointment today!