A Guide to Understanding Your Deductible


| 2 min read

Young woman studying a bill.
Surveys have revealed that many Americans simply don't understand basic health care terms. Understanding what you're paying for and why when it comes to your health insurance can help you get the most out of your plan. When you signed up for your health insurance plan, you likely took into account how much you wanted to pay each month, which was a factor in determining which health plan fit your needs and budget. And with your plan came countless health insurance terms used to describe the various costs, such as ‘coinsurance’, ‘premium’ and ‘copay’, that may not always be easy to understand. Read more on those terms and others here. In this post, we're going to focus on your plan's deductible. A deductible is the amount you owe for covered health care services before your health care plan begins to pay. Throughout the year, you will be billed and pay until the deductible is met. After that, you would be responsible for the co-insurance amount that is billed up to your out-of-pocket maximum. Deductible amounts and out-of-pocket maximums vary based on individual plans. Plans with higher deductibles have lower monthly premiums and vice versa. Regardless of which plan you choose, your deductible will reset each year and insurance will not start payments until the deductible is met again. You can see your plan’s deductible, out-of-pocket maximums and covered health services by using the Blue Cross Blue Shield of Michigan mobile app. If you're a visual learner, the below infographic walks you through how a deductible works. Click to expand.
To learn more about what health insurance is and to understand your health plan, visit bcbsm.com. Next time you visit the doctor or pay a health insurance bill, take a look at your deductible and your monthly premium. Doing so can help you budget for better health, determine if your current health plan is right for you and achieve financial success. Want to learn more about how to maximize your health plan? Read these blogs:
Photo credit: Damir Khabirov
MI Blues Perspectives is sponsored by Blue Cross Blue Shield of Michigan, a nonprofit, independent licensee of the Blue Cross Blue Shield Association