What Does it Mean When Deductibles Reset in January?


What Does it Mean When Deductibles Reset in January?

Health Insurance
Jennifer Hadley
By Jennifer Hadley
Dec 06, 2019 - Updated Nov 27, 2020
What Does it Mean When Deductibles Reset in January?

Each new year, your health insurance deductibles reset. This means that you will again have to meet a threshold of out-of-pocket payments (deductible) before your insurance will begin to pay for your health care. Here’s a detailed look at what happens when deductibles reset in January.

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What happens when deductibles reset?

When deductibles reset in January, the amount you contributed towards your health care in the previous year returns to $0. You will again have to meet the fixed deductible before your health insurance will begin paying for your care. However, most insurance plans do not require that you meet your deductible to have preventative care covered.

Is preventative care subject to the deductible?

Preventative care is typically covered by most insurance plans. That means you won’t need to meet your deductible before certain services and tests will be covered. Some services, tests, and screenings that fall under the category of preventative care include:

  • Well-baby and well-child visits
  • Annual physical/check-up
  • Cancer screenings (mammograms and colonoscopies)
  • Vaccines (flu shots, pneumonia shots)
  • Blood tests (high blood pressure, diabetes, cholesterol)
  • Counseling (weight loss, quitting smoking, depression, substance abuse)

What’s a deductible?

Your deductible is the amount you are responsible for paying before your insurance will begin paying. Deductibles vary widely based on the insurer and the specific health plan you have.

For example, if your deductible is $2,000, you must pay the first $2,000 of your health care expenses on your own. Your insurance will begin covering your expenses after you meet the deductible.

Health plans that offer a low deductible typically have a higher premium, whereas those with a lower premium generally have a higher deductible.

Why does my deductible reset each year?

Deductibles reset each year because insurance plans are based on an annual structure. The cost for health insurance, like auto insurance, and other types of insurance is based on formulas used by insurance companies to predict, balance, and cushion their expenditures.

If you’ve ever re-enrolled in a plan you had the previous year but your deductible increased, that’s because the insurer has made adjustments based on how much they expect to pay in claims.

What happens when my deductible resets?

When your deductible resets in January, you are essentially back at square one, when it comes to your contributions. If you rarely see a health care provider, you may not even notice, or be affected by the reset.

However, if you have underlying health conditions, or require specialists, each January you’ll be facing a new deductible. You’ll need to meet this deductible before your insurance will begin paying for your care.

How can I prepare for a deductible reset?

Knowing that your deductible will reset may help you to plan your care. For example, if you need shoulder surgery, knowing how close you are to satisfying your deductible can help you decide when to schedule it.

If you’ve met—or are close to meeting—your current year deductible, it may make sense to have your surgery before the deductible resets. That way, you won’t have to pay as much out of pocket compared to what you’d have to pay if you waited until after the New Year.

On the other hand, if you’re not close to meeting your deductible, you may decide to wait until it resets.

What is a prescription drug deductible?

A prescription drug deductible (also known as a pharmacy deductible) is the amount you’re required to pay for your prescriptions before your insurance will pay for them. Many insurance plans combine medical and prescription deductibles, so you may not have a separate prescription drug deductible.

Other insurance plans have a separate prescription drug deductible you will need to meet, in addition to your medical care deductible. Prescription drug deductibles work the same way the medical deductible works. You will need to pay a certain amount out of pocket before insurance will begin covering your medications

How do I determine how much a prescription will cost?

If you want to know what your prescriptions will cost, before you pick them up, there are ways to find out. From reaching out to your insurance company to using RxSaver to find prescription pricing at your local pharmacies, there are several ways to learn what your prescription will cost.

Contact Your Health Insurance

You can call your insurance company, using the phone number that is likely on the back of your insurance card. Just be sure to have the name of the medication, and the prescribed dosing when you call.

Your insurance company may also have an app that offers specifics on your plan coverage. Visit your plan’s website to see if an app is offered.

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Call Your Pharmacy

You can call your pharmacy, and ask if a medication you’re prescribed is covered by insurance, and/or what you should expect to pay for a copay.

Check RxSaver for Prescription Pricing

You can check the pricing of more than 6,000 prescriptions using RxSaver. RxSaver is a free prescription drug coupon platform that will show you pricing for your medication at multiple pharmacies near you. You can use RxSaver in place of your insurance if the coupon price is lower than your copay.

Jennifer Hadley

Jennifer Hadley

Jen Hadley is a freelance writer and journalist based in Los Angeles, who writes extensively about the medical, legal, health care, and consumer products industries. Jen is a regular contributor to RxSaver.

The information on this site is generalized and is not medical advice. It is intended to supplement, not substitute for, the expertise and judgment of your healthcare professional. Always seek the advice of your healthcare professional with any questions you may have regarding a medical condition. Never disregard seeking advice or delay in seeking treatment because of something you have read on our site. RxSaver makes no warranty as to the accuracy, reliability or completeness of this information.

If you are in crisis or you think you may have a medical emergency, call your doctor or 911 immediately.