When does a health insurance deductible reset

Most insurance plans charge a monthly premium, but many of them also include a deductible. This is the amount of money that you, the plan recipient, agree to pay prior to your full benefits kicking in toward your medical care costs. Some insurance plans do provide full coverage for things like once-per-year wellness visits with a doctor even if a deductible has not been met, but for the most part, you will not be able to begin taking advantage of your full plan benefits until your deductible is met.

How Much is an Insurance Deductible?

Your deductible amount is unique to your plan, and it may change over the course of your time as a policy holder. As a rule of thumb, plans that charge higher premiums tend to have lower deductibles while plans that have lower premiums tend to have higher deductibles. Essentially, the more you pay each month, the lower the threshold is set for a deductible since you’re already paying higher costs for your health insurance plan each month.

Some Practical Examples

As an example of how a deductible works, consider the following: Mark has an insurance plan with XYZ Insurance. His plan includes a $1,500 deductible. Mark gets into a car accident and ends up needing $20,000 worth of medical care as a result.

In this scenario, Mark will need to pay $1,500 before his insurance provider will begin paying for the remaining $18,500 worth of medical costs. He may also have a copay amount for each service moving forward. This is a set cost that is paid by the insured each time service is rendered. Copay amount tend to range between $15 and $25 for things like office visits, but they can be higher for specialist treatment.

In an alternative scenario, assume that Mark gets into an accident and only incurs $1,000 worth of medical bills and has the same $1,500 deductible. Here, Mark will be required to pay the entire $1,000, and he will still need to incur and pay another $500 to meet is his deductible before his benefits apply toward future medical care costs.

When Does a Health Insurance Deductible Reset?

Although the idea of a deductible is fairly straightforward, you may be wondering whether meeting your deductible means you never have to meet it again or whether there’s a point at which the deductible resets.

For the most part, insurance plans with a deductible divide things by benefit period. This is typically an annual period that runs a full calendar year. At the beginning of each year, your deductible resets and your plan must be renewed. During this time, your deductible may change as your insurer structures its offerings for the upcoming benefit period.

So, even if you’ve met your deductible, and even if that deductible was met right up until the last few days of the year, it still resets at the start of the next benefit period. If you have paid toward your deductible, but have not met its threshold, over the course of the outgoing benefit period, you will likely see no type of benefits application, discount or refund. If you don’t meet your deductible, you simply don’t meet your deductible and benefits are not applied toward your care costs.

Choosing a plan

As stated above, insurance plans generally strike a balance between deductible costs and premiums by having plans with higher premiums include lower deductible costs and plans with higher deductibles include lower premiums. So, which type of plan is right for you?

Answering this question really comes down to your needs. If you require regular medical care, a plan with higher premiums and a low deductible may work better since you’re more likely to meet your deductible quickly. On the other hand, if you seldom require medical care, a plan with a higher deducible and lower premiums may work better.

If you aren’t sure what type of plan would work best, you’re encouraged to partner with an licensed insurance agent to compare plans from several different providers. This approach can give you more options to meet your needs, and it can usually save you money, both now and in the future.