What Is a Deductible in Health Insurance?

You've picked a health insurance plan, you're paying premiums every month, and then you get a bill for the full cost of a doctor visit. What gives? Your deductible. It's the amount you pay out of pocket for covered services before your insurance starts sharing the cost. Until you hit that number, most non-preventive care comes out of your wallet.

How a Deductible Works

Say your plan has a $1,500 deductible. You go to the doctor for a sinus infection and the visit costs $200. You pay the full $200. A month later, you get blood work that costs $350. You pay that too. You've now spent $550 toward your deductible, with $950 to go. Once you've paid $1,500 total, your plan starts covering its share through copays or coinsurance.

Your deductible resets every plan year, which usually starts January 1. Any money you paid toward last year's deductible doesn't carry over.

What's the Average Deductible?

For employer-sponsored plans in 2025, the average single deductible is $1,735 according to the KFF Employer Health Benefits Survey. That number has climbed steadily from around $1,000 a decade ago. PPO plans average about $1,523, while high-deductible health plans (HDHPs) average $2,927.

About 82% of workers with employer coverage have a deductible in their plan. On the ACA Marketplace, deductibles vary by metal tier. Bronze plans (lowest premiums) often have deductibles above $6,000. Platinum plans sometimes have no deductible at all.

Individual vs. Family Deductibles

Family plans have their own wrinkle. An "embedded" deductible means each family member has an individual deductible within the larger family deductible. Once one person meets their individual amount, the plan starts paying for that person even if the family total hasn't been reached.

An "aggregate" deductible works differently. The entire family deductible must be met before the plan pays for anyone. This matters a lot if one family member has high medical costs and others don't.

What You Don't Pay a Deductible For

Under the ACA, all non-grandfathered health plans must cover preventive services at no cost, even before you've met your deductible. That includes annual physicals, immunizations, cancer screenings like mammograms and colonoscopies, blood pressure checks, and well-child visits. These are covered at $0 when you use an in-network provider.

Higher Deductible vs. Lower Deductible

There's a direct relationship between your deductible and your premium. Plans with high deductibles charge lower monthly premiums. Plans with low deductibles charge more each month. Neither option is automatically better.

If you're generally healthy and don't expect many medical expenses, a high-deductible plan can save you money on premiums. You're essentially betting that you won't need much care. If you take regular medications or have a chronic condition, a lower-deductible plan usually costs less over the full year even though the premium is higher.

HDHPs and the IRS Threshold

The IRS sets specific deductible minimums for plans that qualify as HDHPs. For 2026, the minimum is $1,700 for individual coverage and $3,400 for family coverage. Meeting this threshold is required if you want to pair your plan with a Health Savings Account (HSA), which lets you save pre-tax money for medical expenses. The 2026 HSA contribution limits are $4,400 for individuals and $8,750 for families.

Deductibles and Out-of-Pocket Maximums

Your deductible is part of your out-of-pocket maximum, not separate from it. Once your deductible, copays, and coinsurance combined reach the out-of-pocket max, the plan covers everything at 100%. For 2026, ACA plans cap the out-of-pocket maximum at $10,150 for individuals and $20,300 for families.