According to the Medical Expenditure Panel Survey, in 2006, 66.4 percent of people who had insurance through their employer were responsible for paying a deductible for some medical coverage under the terms of their plan.
Identification
A deductible is a set dollar amount that individuals have to pay for medical services before their insurance begins to cover the cost. The deductible covers a set period of time, usually a year, and restarts at the beginning of the next time period.
Types
Your health insurance policy may require more than one deductible. For instance, you may have an individual deductible that must be met as well as a family deductible, or you may find that certain services, such as hospitalization or specialist visits, have their own deductibles that are counted separate from your plan's general deductible.
Considerations
In general, the higher your deductible is, the lower your monthly insurance premiums will be. In other words, you'll pay less for your insurance each month because you are paying more out-of-pocket for medical expenses. A low deductible usually translates to higher monthly premiums.
Expert Insight
According to the Medical Expenditure Panel Survey, smaller companies--defined as those with 99 or fewer employees--had higher deductible requirements than larger companies. Companies with 10 or fewer paid the highest deductibles. According to the survey, the average individual deductible in 2006 across companies of all sizes was $714; the average family deductible that year was $1,351.
Warning
In some insurance plans, the deductible is higher when you use doctors or services that are not part of the plan's approved network, or you may have a deductible only when you use doctors or services who are out of network. Be sure you understand your financial responsibilities before scheduling medical appointments.
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