[eli5]What is a deductible in health insurance?

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I’m currently shopping for health insurance and have no idea what a deductible means. I looked it up several times and I just have no idea what it means at all.

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Premium = pay this to have access to insurance

Deductible = pay this for medical service before we will pay

Coinsurance = A % that you will still pay after deductible

Copay = You pay this much and we pay this much (per item and this is usually not along with coinsurance)

Out-Of-Pocket Maximum (OOPM) = The most you will have to pay out of pocket (usually broken into individual and family)

Be careful with OOPM because it doesn’t always work the way you think. There is an “individual” and a “family” OOPM for most plans. The ideas are related but not the same. If you had an individual OOPM of 500 and your family OOPM was 2000 you do not reach the family OOPM once one person pays 2000 because they cannot get that far. Their individual maximum is 500 so their expenses after that are covered. The family deductible having an OOPM must be met collectively by the individual OOPMs. So if your family OOPM is $2k and your individual OOPM is $500 then you will need at least four members of your family to hit their $500 before your family will kick in. The function of the family benefit here is to help larger families. Say you had 6 kids and your individual was $500 and the family still $2000 – when you hit the $2000 for the family (having paid OOPM for 4 people fully) the rest of care for the family that falls in the terms of the coverage is then covered by insurance. So if you’re particularly in a small family this family number may not actually make a big difference to you if you know that the people in your family cannot have reached the family OOPM before everyone in the family satisfies the individual OOPM. All of these things are sort of confusing intentionally by the companies that release the plans.

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