Do Health Insurance Deductibles Reset Every Year?

Health insurance deductibles often present a point of confusion for many individuals seeking to understand their coverage. Health insurance deductibles typically reset on an annual basis, which directly impacts how policyholders manage their healthcare expenses throughout the year. This annual reset means that the amount you have paid towards your deductible restarts from zero at the beginning of each new benefit period.

What is a Health Insurance Deductible

A health insurance deductible represents the amount of money a policyholder must pay out-of-pocket for covered healthcare services before their insurance company begins to contribute to the costs. For instance, if a health plan has a $2,000 deductible, the policyholder is responsible for the first $2,000 of covered medical expenses incurred. Payments for services like doctor visits, hospital stays, or prescription medications typically count towards this amount. Once this sum is reached, the insurance plan will then start sharing the cost of subsequent covered services.

This arrangement means that until the deductible is fully met, the policyholder pays the entire negotiated cost for most covered services. The deductible does not include the monthly premium paid to maintain the insurance coverage.

When Deductibles Reset

Health insurance deductibles reset almost universally on an annual cycle. For most health plans, this reset occurs on January 1st, aligning with the calendar year. This common practice simplifies financial planning for many individuals as it coincides with the standard calendar year.

Some health plans, particularly employer-sponsored group plans, may operate on a “plan year” which does not necessarily align with the calendar year. A plan year could, for example, run from July 1st to June 30th of the following year. Policyholders should consult their plan documents, such as the Summary of Benefits and Coverage (SBC), to confirm their specific deductible reset date.

Navigating Your Deductible Annually

After a deductible resets, charges from doctor’s appointments, emergency room visits, or outpatient procedures will systematically reduce the remaining deductible balance. Many preventive care services, such as annual check-ups and immunizations, are often covered by insurance at 100% and do not require the deductible to be met. These services are typically accessible without any out-of-pocket cost to the policyholder.

Once the annual deductible is met, the insurance plan begins to share the costs of covered services. At this point, cost-sharing typically shifts to coinsurance and copayments. Coinsurance is a percentage of the cost of a covered service that the policyholder pays, with the insurance company covering the remaining percentage. For instance, if a plan has 20% coinsurance, the policyholder pays 20% of the bill, and the insurer pays 80%. A copayment, conversely, is a fixed dollar amount paid for certain services, such as a doctor’s visit or a prescription refill. Copayments can sometimes count towards the deductible, but this varies by plan.

All payments made towards the deductible, coinsurance, and copayments typically count towards an annual out-of-pocket maximum. This out-of-pocket maximum is the highest amount a policyholder will pay for covered healthcare services within a plan year. Once this maximum is reached, the insurance plan covers 100% of all subsequent covered medical expenses for the remainder of that benefit year. Premiums, however, do not count towards the out-of-pocket maximum. For 2025, the out-of-pocket maximum for Marketplace plans cannot exceed $9,200 for an individual or $18,400 for a family.