Understanding Your Deductible and End-of-Year Healthcare Plan


December 12, 2020

There is no better time to enjoy health benefits than the end of the year. By this time, most people have already met their health insurance deductibles and even out-of-pocket maximums and can therefore enjoy health care services at significantly cheaper costs.

Read on to learn more about your deductible, how it works, and how you can make money-saving decisions and make the most of your end-of-year health plan.

What Is a Deductible?

Your deductible is the amount of money you must first pay out-of-pocket for services covered by your health care plan before your insurance company starts to pay anything. For example, if you have a $2,000 deductible, you’ll pay the first $2,000 of your healthcare costs, and once you reach this threshold, your plan will start covering them.

How It Works

The deductible varies by the health plan, and it resets to zero at every start of the year. This means that you have to meet your deductible for the next year before your insurance kicks in. However, your plan will still cover the cost of certain preventive benefits such as; vaccination and wellness check-ups even before you fulfill your yearly deductible as mandated by the Affordable Care Act.

After you’ve met your deductible, you’ll only need to pay a small portion of your healthcare costs through coinsurance or copayment while your insurer pays the rest. Copays and coinsurance also vary in different plans, but your insurer will typically pay 80% of your healthcare costs while you pay the remaining 20%.

Can My Plan Cover 100% Of The Costs?

The answer is yes. You can enjoy free healthcare and medical services, and your plan will pay their full cost. However, this can only happen after you have met your out-of-pocket maximum for the year. The out-of-pocket maximum is the maximum amount of money you can pay for your medical services each year.

For instance, if you have a $2,000 deductible and a $2,500 out-of-pocket maximum and you meet your $2,000 deductible, you can only pay up to $500 of copays on services. Once you hit that threshold, your plan will cover 100% of your medical costs. However, this is limited only to the services covered by your healthcare plan.

Making Most of Your End-Of-Year Healthcare Plan

As earlier stated, the end of the year is the best time to schedule those additional procedures you’ve been putting off. If you have already met your yearly deductible and out-of-pocket maximum, you won’t have to copay for these procedures.

Similarly, if you have a Flexible Spending Account (FSA), the money in this account has a ‘use-it-or-lose-it’ penalty and will not be available next year. We’re just a few weeks away from the end of the year, and if you still have available funds for the year in this account, now is the time to use them.

Schedule an appointment with SEPSC before the year’s end or call to see what is available for your personalized treatment plan and maximize your end of year health plan this year.