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Published on February 27, 2020

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What’s the Difference Between Family and Individual Deductibles?

Family plans have both individual and family deductibles.

The Basics

  1. Each family member has an individual deductible. The family has a deductible, too. All individual deductibles funnel into the family deductible.
  2. The family deductible can be reached without any members on a family plan meeting their individual deductible.

Example: ½ individual deductible + ½ individual deductible + ½ individual deductible + ½ individual deductible = family deductible

  1. If two family members reach their individual maximum out-of-pocket, all members are covered 100% through the end of the plan year.

Example: Individual maximum out-of-pocket + individual maximum out-of-pocket = family maximum out-of-pocket

Let’s see how it works for a family of four following this sample plan:

Co-pay: $35

Coinsurance: 30%

Individual deductible: $2,750

Family deductible: $5,500

Individual maximum out-of-pocket: $7,500

Family maximum out-of-pocket: $15,000

  1. Erik breaks his leg and goes to the emergency room for X-rays and care. It costs $1,900, which goes toward his individual deductible and the family deductible. It will also apply toward the individual and family max out-of-pockets. He’s responsible for 100% of these charges because he didn’t meet the individual deductible.
  2. Brandie has a baby. She has an epidural and vaginal delivery with postpartum care for a total cost of $12,700. Brandie pays $2,750 to meet her deductible, which also goes toward the family deductible, individual and family max out-of-pockets. The remaining balance applies to coinsurance and she is responsible for 30%, totaling $2,985 for a total out-of-pocket cost of $5,735

+ $2,985 coinsurance (30% coinsurance x $9,950)
=$5,735 total Brandie would pay

The family deductible amount that is met increases to $4,650.
(Eric $1,900 + Brandie $2,750)

  1. Daughter Remi goes to urgent care for a 102-degree fever. The urgent care visit is a co-pay of $35 and she gets a generic prescription costing $5. Office co-pays and pharmacy do not contribute to deductibles but do contribute to the out-of-pocket maximums.

The family deductible amount that is met remains at $4,650.
(Eric $1,900 + Brandie $2,750)

  1. Baby Ray is added to the plan after birth. He is taken to the emergency room and is admitted for RSV. His bill is $1,300.

After paying $850, the family deductible is met.
(Eric $1,900 + Brandie $2,750 + Ray $850 = $5,500)
Ray’s remaining bill of $450 is covered at 70% after paying the 30% coinsurance of $135.

The entire family will now only pay coinsurance and co-pays until they meet the maximum out of-pocket or the plan year ends. Based on the family’s charges, they’ve met $8,660 of the family maximum out of pocket.

(Eric $1,900 + Brandie $5,735 + Remi $40 + Baby Ray $985 = $8,660)

When you’re trying to determine overall cost for the year, keep this in mind. The least you’ll pay is your 12 monthly premium payments. The most you’ll pay is your 12 monthly premium payments plus your out-of-pocket maximum.

Download our infographic to keep this information handy.

You can learn more about how health insurance works at AveraHealthPlans.com

*This example uses a sample plan. Co-pay, coinsurance and costs for services may vary according to plan type.

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