A deductible is a fixed amount of money you must pay before an insurance company will start to pay a portion of covered medical expenses. For family coverage, your deductible may be classified as either embedded or aggregate (non-embedded).
Did you know...? Insurance companies typically pay the costs of preventative care visits whether you've met your deductible or not.
Note that copays, coinsurance, premiums, and non-covered expenses don't count towards a deductible.
If you are on a family plan with an embedded deductible, your plan has two deductibles:
- An individual deductible
- A family deductible
A plan with an embedded deductible provides better coverage for individual members. Once a family member meets his or her individual deductible, health insurance begins paying for covered services—even when the larger family deductible hasn't been met.
For example, let's look at the Gomez family. In their case, the individual deductible is $2,000 and the family deductible is $6,000.
Even though the Gomez family has not met the family deductible, Anna has met her individual deductible. From this point forward, insurance will pay a share of any additional medical expenses Anna incurs (Anna is "covered").
Aggregate Deductible (non-embedded)
If your family plan has an aggregate deductible, the full family deductible must be met before health insurance kicks in for any individual member of your family.
Under this plan, none of Anna, Jaime, or Jorge's medical expenses will be covered by insurance yet. Their total expenses are at $3,000, and the Gomez family must reach the full $6,000 for insurance to pay a share of medical costs.
While an aggregate deductible may have a lower monthly premium, the total family deductible must be met before insurance pays a portion of the medical costs.