Heads up!

While your health insurance deductible (and the timeline it follows) might not be something you typically think about during the holiday season, it's important to give it some thought. Having a handle over out-of-pocket medical expenses like your deductible makes a massive difference in your medical bills, and the holiday season has a common, super important deadline: the reset date. 

Here's what you need to know!

First Thing's First: What IS a Deductible? 

If you've ever shopped for your own health insurance, you've likely seen the word "deductible" pop up everywhere. Despite being a key element of how health insurance costs are determined, the way deductibles work isn't always mechanically clear to everyone. This can especially be the case with "low cost, high deductible" plans. These plans feature a lower monthly cost but can come with a surprisingly high cost when the bill arrives.

Simply put, a deductible is the amount of money your insurer expects you to contribute before they begin to cover the cost of healthcare. Deductibles are designed to offset some of the cost to an insurer, meaning plans with lower monthly costs typically come with higher deductibles. For example, if your annual deductible is $4,500, then your insurer expects you to pay that much in healthcare bills before they begin to comprehensively cover care. 

It's worth noting there is a ton of fine print in this system. For example, plans sold through the Healthcare.Gov marketplace must cover the full cost of certain preventive treatments. Additionally, some cost-sharing measures like copayments and coinsurance won't generally count towards your deductible. Some plans may also have multiple deductibles too, which can impact the timeline in which insurance coverage begins to fully cover healthcare. Ultimately, the factors that can modify a deductible are too expansive to cover in a single article, so make sure to ask your insurer directly if you have any questions—they'll have concrete answers on matters of coverage policy.

Many health insurance plans have a deductive reset date that begins at the top of the calendar year, or January 1. This is when the deductible value resets and you're once again required to begin paying it down for healthcare coverage. While plenty of insurance plans do reset on January 1, not all of them do. Again, make sure to ask your provider if you have any questions. 

Why Is the Deductible Reset Date Important? 

Being mindful of your deductible reset date can literally mean a difference of thousands of dollars. If you're planning medical care, then having it done in December might mean the bill benefits from a year worth of deductible payments. Likewise, waiting until January means you might be on the hook for the full cost of your deductive before your insurance will cover some healthcare—especially if it's considered elective.

As a result, it's a good idea to avoid putting off care until after the holidays. While December can be a stressful month for a variety of reasons, it's worth making some time to schedule those doctor's visits if it means being able to get them covered fully by your insurance. Additionally, if you plan to purchase any medical products or devices—such as mobility aids or medications—then these costs can also be impacted by the timetable on your deductible.

While deductibles are too much of a complex, specific policy matter to break down entirely, understanding how your deductible cutoff date can affect your healthcare is important. At the very least, being mindful of your deductible can go a long way to avoiding surprise medical expenses.

In the event you're one of the many millions of Americans who will be shopping for a policy this winter, keep these considerations in mind too in order to pick the plan that works best for you.