Aggregate Deductible Health Insurance

There are several forms of health insurance to consider buying for your family. You might select an HMO (health maintenance organization), where you pay co-pays for services. Traditional and managed care plans have deductibles and coinsurance (a percentage that the insured pays after the deductible is exceeded). Deductibles can be individual or aggregate--aggregate deductibles include all family members. When you reach an aggregate deductible for the family, the insurance company pays the total allowable portion of the next person's claim. If it's under the aggregate maximum family amount, a coinsurance percentage might be applicable.

If you have a large family and each has a $500 deductible, you might have to pay a huge amount out of pocket before you reap any benefits of insurance. To avoid this, the company sets an aggregate deductible. It depends on the amount, but if you have two or three family members who reach their deductible, you've probably met the aggregate deductible.

The aggregate deductible covers the policy year. In most cases, that's also the calendar year. Once the year ends, you start the process of accumulation over again and begin a new deductible.

Using the aggregate deductible to your advantage is important. If you need to have a minor procedure and have met the family aggregate deductible for the year, do it before the year ends. Many people plan around their deductible for the family. If they have limited bills for one year and need an expensive procedure near the end of the year, often they postpone the procedure to the following year. That way, they have the rest of the year with the deductible fulfilled.

Insurance policies often state the aggregate deductible as the number of family members' deductibles met. If the policy states two family members must reach the deductible, no one else has to. Of course, if you have a policy with only two people, it doesn't help at all.

Meeting the deductible doesn't mean that you've hit the maximum you pay for the year. Often policies have coinsurance factors. These are percentages. If the co-insurance is 80/20, it means you pay 20 percent of the bills until you reach a stated out-of-pocket maximum. Normally there is also an aggregate out-of-pocket maximum for the family. It is a dollar amount.

Check your policy for carryover. Companies know that a serious illness doesn't go away at the end of the calendar year. People with high insurance expense often find themselves strapped to pay a new deductible the next January. Some companies offer carryover for the last three months' bills. This means that if you meet a deductible in the month of December, you may not have to pay it again in January.