The D Word

What word strikes fear in the hearts of people and simultaneously makes their eyes glaze?

Deductible.

I recently challenged myself to do an open enrollment meeting with a client and their employees and NOT mention the "D" word. I succeeded. Barely.

It's all so simple. Deductible means YOU PAY FIRST. You pay first, then the insurance company begins to share the burden with you.

Some plans have low ($250-$500) "you pay firsts" and some plans have high ($1000-$3000) "you pay firsts".

The less you pay first, the more insurance costs. The more you pay first, the less insurance costs.

Why? Because when you pay more first, it takes longer for the insurance company to start sharing with you. 

Stop reading here if you don't want your eyes to glaze. But there is more technical knowledge for you to consider in deductible parlance.

1. Family deductibles can be aggregate or embedded. Aggregate means that one person must meet the full family level "you pay first" before insurance shares the cost with you. Embedded means that one person must only meet the single level "you pay first" before the insurance shares the cost with you.

2. You pay firsts are accrued on a CALENDAR year for most health plans. This applies even if your open enrollment date is 5/1.

3. In some cases, the deductible applies to your annual out-of pocket maximum (MOOP), and sometimes it doesn't. Make sure you consult your health plan summaries.