Key Takeaways

• Understanding how deductibles work in your PSHB plan helps you avoid unexpected costs when you need medical care.

• Choosing the right plan based on your healthcare needs can save you money over the course of the year.

What Is a Deductible and How Does It Work?

A deductible is the amount you must pay out of pocket for healthcare services before your PSHB plan starts covering costs. It resets every plan year, so any expenses paid toward it do not carry over. Your deductible applies to services like hospital stays, specialist visits, and diagnostic tests, but some benefits—like preventive care—may be covered without requiring you to meet your deductible.

When you pay for medical services, the amount is applied toward your deductible. Once you reach it, your plan begins covering a portion of the costs, typically through coinsurance or copayments. Understanding this structure ensures that you’re financially prepared when you need medical care.

1. Choosing the Right Deductible for Your Needs

Not all PSHB plans have the same deductible. Some offer lower deductibles with higher monthly premiums, while others have higher deductibles with lower premiums. The right choice depends on your healthcare needs and financial situation.

• Low-Deductible Plans: If you frequently visit doctors, require regular prescriptions, or anticipate medical procedures, a lower deductible may be more cost-effective. Although you’ll pay more each month in premiums, your out-of-pocket expenses for services may be lower.

• High-Deductible Plans: If you are generally healthy and don’t expect many medical expenses, a high-deductible plan could save you money. These plans often have lower premiums but require you to cover more upfront costs before coverage kicks in.

By assessing your medical history and anticipated healthcare needs, you can make an informed decision about which deductible level is best for you.

2. Understanding What Counts Toward Your Deductible

Not every healthcare expense applies to your deductible. It’s important to understand which costs count and which do not so that you can plan your budget accordingly.

Expenses That Typically Apply:

• Doctor visits (except preventive care)

• Specialist consultations

• Hospital stays and surgeries

• Diagnostic tests like MRIs and bloodwork

• Certain prescription medications

Expenses That Typically Do Not Apply:

• Preventive services (often covered at 100%)

• Copayments for office visits or prescriptions

• Services covered with fixed copay amounts before meeting the deductible

Reviewing your plan’s summary of benefits can help clarify which costs contribute to meeting your deductible.

3. How Deductibles Interact With Other Out-of-Pocket Costs

Meeting your deductible is just one part of managing healthcare expenses. Other costs, such as copayments, coinsurance, and out-of-pocket maximums, play a role in your total healthcare spending.

• Copayments: A fixed dollar amount you pay for services like doctor visits or prescription drugs. Copayments do not count toward your deductible.

• Coinsurance: The percentage of costs you pay for services after meeting your deductible. For example, if your plan covers 80% of a procedure, you will pay the remaining 20%.

• Out-of-Pocket Maximum: The maximum amount you’ll pay for covered services in a plan year. Once reached, your plan covers 100% of covered costs for the rest of the year.

Understanding how these factors interact with your deductible can help you manage healthcare expenses more effectively.

4. Planning for Deductible Costs in Advance

Because deductibles reset annually, planning ahead for potential expenses can prevent financial strain. Here are a few steps to help you prepare:

Budget for Your Deductible

If your deductible is $1,500, consider setting aside a portion of that amount throughout the year. That way, if an unexpected medical expense arises, you’ll be financially prepared.

Use Preventive Care Services

Many PSHB plans cover preventive services like annual check-ups and vaccinations without requiring you to meet your deductible. Taking advantage of these services helps maintain your health and reduces the likelihood of larger medical bills later.

Check for Eligible Cost-Saving Accounts

If your PSHB plan is a high-deductible plan, you may be eligible for a Health Savings Account (HSA) or Flexible Spending Account (FSA). These accounts allow you to set aside pre-tax dollars for medical expenses, reducing your overall healthcare costs.

Why Understanding Your Deductible Matters

Knowing how your PSHB deductible works ensures that you’re financially prepared for healthcare expenses. By choosing the right deductible level, understanding what costs count toward it, and planning for out-of-pocket expenses, you can take control of your healthcare budget.

To make the best decision about your PSHB plan, get in touch with a licensed agent listed on this website. They can help you evaluate your options and find the coverage that fits your needs.