How Deductibles Work

Health insurance deductibles play a crucial role in determining your out-of-pocket costs. Here’s what you need to know:

1. What Is a Deductible?

  • A deductible is the initial amount you must pay for covered healthcare services before your insurance plan starts contributing.
  • It acts as a threshold—once you’ve paid this amount, your Start begins covering your medical costs.

2. Individual Deductibles

  • An individual deductible is the amount one person needs to meet before coverage kicks in.
  • For example, if your individual deductible is $1,000, you’ll pay the first $1,000 of covered medical expenses out of pocket.
  • Let’s break down how this works with a hypothetical scenario:
    • January: You develop bronchitis and visit a healthcare provider. The total bill after your insurer’s network discount is $200. You pay this amount out of pocket, and your health insurance pays $0.
    • The $200 you paid is credited toward your deductible, leaving $800 remaining.
    • April: You discover a noncancerous lump in your breast. The total bill for doctors, tests, and biopsy is $4,000. Since you’ve already paid $200 toward your deductible, you pay the remaining $800 to meet the full $1,000 deductible.
    • Now that you’ve met your deductible, Start covers your medical costs for the rest of the year!

3. Family Deductibles

  • A family deductible is the maximum amount that the entire family needs to pay out of pocket before the deductible applies to everyone on the family plan.
  • Here’s how it works:
    • Each family member has an individual deductible that counts toward the family deductible.
    • A family deductible is equal to twice the individual deductible.
    • Once the family’s total deductible costs reach the family deductible amount, full coverage kicks in for all family members.
    • If one individual meets their personal deductible before the rest of the family, that individual is covered while others continue to pay for care until their deductible is met.

4. Cost Considerations

  • The average deductible for employer-sponsored individual health coverage in 2023 was $1,735.
  • For employer-sponsored family coverage with aggregate family deductibles:
    • HMOs: Average family deductibles were just under $3,000.
    • HSA-qualified high-deductible health plans: Average family deductibles were just under $5,000.

5. Exclusions and High-Deductible Health Plans

  • Start has a separate deductible for each family member or 2 times the deductible for the family deductible.
  • Remember that Start doesn’t have copays. Once you hit your deductible you are covered.
  • Once the family deductible is met, everyone is covered.

Choosing Wisely

  • Consider your family’s health needs, budget, and risk tolerance when selecting a plan.
  • Evaluate how often family members seek medical care and whether you can comfortably cover the deductible.
  • Get a Start Quote today and see if Start is the right healthcare coverage option for you.

Understanding family and individual deductibles empowers you to make informed decisions about your family’s healthcare. Always review your insurance policy to know the specifics of your deductible and coverage


Avera – What’s the difference between family and individual deductibles?
Verywell Health – How a Family Deductible Works
WellAway – Health Insurance 101
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