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How Family Deductibles Work

There are many advantages to purchasing a family health insurance plan. Having one of these plans is much cheaper than paying for individual plans for each person in your family, and will give you peace of mind knowing that everyone in your household is fully covered. While you will only need to pay one monthly premium with a family health plan, you do need to be aware that there are typically two kinds of deductibles involved: individual deductibles and a family deductible. Having multiple deductibles can seem a little confusing, but it is simple once you know what to expect.

caucasian doctor standing up handing a caucasian man sitting down a paper
If your doctor orders a procedure or lab work, then you have to meet your deductible before insurance pays. 

What Is a Deductible?

When you go to the doctor, get lab work done, have surgery, and even buy prescription drugs, your health insurance company pays a portion of your expenses. But, in order for your insurer to begin paying these expenses, you must first meet your deductible. Your deductible is the amount of money you have to pay out-of-pocket before your health insurance company will start paying for your medical expenses. 

Individual deductibles apply to one person on the policy, and the family deductible applies to total costs incurred by ALL members on the policy.

Meeting Your Deductibles

Although your plan will have both individual deductibles and a family deductible, you will not be required to meet both deductibles before your plan starts paying out for your medical expenses. The following is a breakdown of how these two kinds of deductibles work:

  • If a family member meets their individual deductible, then the insurance company will start paying their claims, even if the family deductible has not been met  yet.
  • Once the family deductible is met, then the insurance company will begin to pay  everyone’s expenses, and members will no longer need to meet their individual deductibles.

The family deductible system is the same as having what is known as an embedded deductible. This means that individual deductibles are embedded within the family deductible and will count toward the family deductible. Generally, a family deductible is double what a plan’s individual deductibles are. For example, if the individual deductibles are $500, then the family deductible will be $1,000.

To simplify how it all works, let’s use an example:

A family of four has a family deductible of $1,000 and individual deductibles of $500 each:

  1. Mom has surgery and pays her $500 deductible. That $500 also goes towards the $1000 family deductible, leaving $500 to pay towards that deductible. Mom no longer has to pay out of pocket for her individual medical costs. However, dad and their two children will have to pay for any medical expenses until they meet their individual deductibles. little caucasian boy laying down on a hospital bed with blood on his knee and gauze on foot with doctor checking him
  2. One child in the family has a trip to urgent care and incurs $300 in medical expenses, which will go towards the child’s individual deductible. This will also go towards the remaining $500 of the family deductible, and now the family will only have $200 left for their family deductible to be met. The child also has $200 left on their individual  deductible ($500 – $300 = $200) before insurance will begin to pay their bills.
  3. Dad gets blood work done and has to pay $200 in deductible costs. That $200 goes towards the family deductible, meaning they have reached their $1,000. Now that the family deductible is finally met, everyone in the family (even those who did not meet their own deductibles) can receive care and the insurance company will pay for any medical expenses incurred. 

What Is Not Included In Your Deductible

There are instances in which you or a family member will receive care that does not count  towards your deductible. Things that are not covered by your health insurance plan, such as out-of-network care, will not count towards your deductible. If you choose to see an out-of-network doctor, or get elective surgery that insurance does not cover, then the costs will be completely out-of-pocket and will not count towards your deductible.

white pill bottle laying sideways on a yeallow table with white round tablets spread out of it.
Medication costs, among other costs, does not go towards your deductible.

Copayments and prescription costs don’t count towards your deductible either. Certain types of preventative care are also paid for by your insurer without you having to meet your deductible before they will begin to pay their portion of the costs.

Unfortunately, deductibles are a necessary part of having health insurance, and are not something we can opt out of. The way that deductibles work with a family health insurance plan can be confusing:  you might assume that if you have a family deductible to meet, then you would not have individual ones as well. But the good news is that paying your individual deductibles goes towards the family deductible. 

If you are looking for a plan that will cover your family without breaking the bank, EZ can help. We work with the top-rated insurance companies in the country and can compare plans in minutes. Health insurance costs are on the rise and can be expensive, which is why we offer our services for free. Our goal is to provide you with quotes on affordable plans and to save you money, all without making a dime off of you, because health insurance is costly enough!

To compare quotes for free, simply enter your zip code in the bar above, or to speak to one of our agents, call 888-350-1890.

About The Author: Cassandra Love

With over a decade of helpful content experience Cassandra has dedicated her career to making sure people have access to relevant, easy to understand, and valuable information. After realizing a huge knowledge gap Cassandra spent years researching and working with health insurance companies to create accessible guides and articles to walk anyone through every aspect of the insurance process.
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