Browse by Topic

Browse by Plan Type

Other Help

Not finding what you need in this section for members and insurance shoppers? Check out our other help sections below.

How to understand deductibles and their impact on premiums

Who is this for?

Michigan Health Insurance – Customer Service – How To

This information will help you if you're shopping for health insurance and have questions about how it works and how your money is spent.

When deciding which health insurance plan works best for your budget, it’s important to understand how your deductible can affect your premium.

  • Your premium is the monthly amount you pay to your health insurance company to maintain your health care coverage. You may have to pay the total cost of your premium, or you might share the cost with your employer or union.
  • A deductible is the amount you pay for health care services before your health insurance begins to pay.

For example, if your plan deductible is $1,500, you would pay 100 percent of your health care charges out of pocket until the amount you paid reached $1,500. After that, your insurance company will pay a percentage of the charges based on the details of your plan.

How do they work together?

If you choose an insurance plan with a high deductible amount, you will most likely have a lower monthly premium. If your plan has a high monthly premium, the deductible amount will be lower.

Should you choose a lower monthly premium or a lower deductible? It depends on how you use your health insurance. 

If you don’t use your health insurance much and want to keep your monthly costs low, picking a bronze plan might save you money.

But if you use your health coverage often, you may come out ahead if you pay a little more each month for your premium in order to get a lower deductible. With a lower deductible amount, you’ll pay less out of pocket before your insurance starts paying a percentage of the costs. In this case, you may want to choose a silver or gold plan.

Related Items

Was this content helpful?

Rate it

Submit >

One site. One stop.

Managing your health plan online
has never been easier. On the new bcbsm.com, all your account information is in one place and personalized, so it's more useful.
Even better, you can access it anytime, anywhere, from your mobile device.

I’d like to register

Log in to my account

©1996-2014 Blue Cross Blue Shield of Michigan and Blue Care Network are nonprofit corporations and independent licensees of the Blue Cross and Blue Shield Association. We provide health insurance in Michigan.

State and Federal Privacy laws prohibit unauthorized access to Member's private information. Individuals attempting unauthorized access will be prosecuted.

Site Map  |  Feedback  |  Important Legal and Privacy Information

Explanation of Level A Conformance
Better Business Bureau Online Seal of Reliability