Helping Families of Children with Special Needs to Understand Deductibles

One of the most confusing aspects for families of children with disabilities is the concept of deductibles and how that plays into cost-sharing.  Many parents will choose plans with lower deductibles, but this may mean there is also a level of fewer benefits, which could be particularly problematic for children with special health care needs.

What is a Deductible?

According to Healthcare.gov, the deductible is “[T]the amount you owe for covered health care services before your health insurance plan begins to pay.”  For example, if the plan’s deductible is $500, that’s how much you would have to pay before insurance kicks in.

Please note that there can be either individual or family deductibles under the plan.  (Each individual deductible generally will be lower than a family deductible for a similar plan.)  If you have an individual (“embedded”) deductible, each individual would have to reach that deductible before his or her healthcare costs would be covered.  If it’s a family (“aggregate”), deductible, that means that the deductible amount would have to be spent across all family members before their healthcare costs would be covered. It may be necessary to call an insurance plan to find out what type of deductible it has.

While it may sound better to have one family deductible this is NOT necessarily better when it is expected that one family member – such as a child with special health care needs – will have higher health care costs than other family members.  For example, if there is a family deductible of $2,000, then insurance coverage won’t apply for any family member until the family has spent that much out of pocket.  But if each family member has a $500 deductible, then insurance coverage will be applied for an individual family member once his or costs have reached the deductible. (See blog post from the Georgetown Center on Health Insurance Reform at.

What Families Need to Know

Deductibles are only part of total health costs.  Parents must also consider premiums (cost of buying the insurance policy) as well as out-of-pocket costs, including copays (see Resources.)  Families can also save money by using “in-network” providers, which means health care providers that participate with their plan and agree to accept the payment amount provided by the insurer.

Key things for parents of children with special needs need to keep in mind about deductibles are:

• There is no deductible for preventive services.
• Some plans offer other (non-preventive) services without a deductible, although any copayments will still apply.  Examples include  visits to a primary care provider and some specialists (e.g. mental health), and/or prescriptions.  To find out which services are covered without a deductible, go to healthcare.gov, pick a plan, and click on “costs for medical care.”  An even more detailed list is available on the plan “Summary of Benefits and Coverage.”
• When choosing a plan, families can look at services without a deductible along with premiums and other out-of-pocket costs.  During open enrollment, there is an “Out-of-Pocket Costs” tool on Healthcare.gov which estimates premiums, deductibles, and copays for the year.
• Some families can save on out-of-pocket costs by selecting a “silver plan.”  More information is available at,
• It is important to find out whether a plan has a family deductible or individual deductibles for each family member, and then figure out which is likely to be more advantageous for them.  (If the type of deductible is not indicated on healthcare.gov, it will be necessary to call the insurance company to get that information.)

Understanding deductibles and other cost-savings is a key issue for families of children with special needs.  By examining how deductibles work, and not just picking the lowest- deductible plan, parents will get the best coverage for their child with special healthcare needs at the most affordable cost.

The Latest Data

An October 2015 analysis by the Kaiser Family Foundation (KFF) found that about 32.3 million people in the US were uninsured and that nearly half of those people, or over 15 million individuals, were either eligible for Medicaid or for financial assistance to help them purchase ACA coverage.  More than 25 percent of the uninsured were adults and children eligible for Medicaid/CHIP, while the remainder were eligible for premium assistance to purchase ACA coverage through the health insurance Marketplace.

Who is Affected?

One reason so many people remain uninsured is that that some states decided against expanding Medicaid coverage.  Nearly 10 percent of the uninsured, or over 3 million people, are in this “coverage gap.”  These people are unlikely to be able to afford to purchase private coverage, but under the ACA they are not eligible for subsidies; under the ACA as written, these people would have received Medicaid benefits, but the Supreme Court made the Medicaid expansion optional for states.

Ten percent of the uninsured (over 3 million) are children who are eligible for but not enrolled in Medicaid or the Children’s Health Insurance Program (CHIP).  Another 20 percent of the uninsured are Medicaid-eligible adults who are not enrolled.

The uninsured population also includes undocumented immigrants, who are not permitted to purchase insurance through an Exchange or receive subsidies.  Some other immigrants must wait five years to be eligible for Medicaid.  It is important to note that while some parents may not be eligible for Marketplace plans or Medicaid, in mixed immigration-status families the children could still be eligible for premium subsidies or Medicaid/CHIP.

Another group of uninsured individuals are those who are not eligible for premium subsidies because their incomes are too high or because they have an offer of insurance from their employer.

Healthcare implications

The Kaiser Family Foundation developed a primer on the uninsured, which discusses reasons for the lack of coverage and the health implications of not having insurance.  According to the primer, “The access barriers facing uninsured people mean they are less likely to receive preventive care, are more likely to be hospitalized for conditions that could have been prevented, and are more likely to die in the hospital than those with insurance.”

Although the number of uninsured significantly declined due to the ACA, many are still without insurance coverage.  There are many misconceptions as to who is uninsured.  The primer smashes some of these myths and notes that “A majority of the remaining uninsured population is in a family with at least one worker, and many uninsured workers continue to lack access to coverage through their job.”

What Can be Done?

According to the KFF primer, “Some of these [uninsured] children may be reached by covering their parents, as research has found that parent coverage in public programs is associated with higher enrollment of eligible children.”i   Although non-citizens are at higher risk of being uninsured, most of the uninsured are citizens.  Reaching out to mixed immigration-status families will also increase enrollment.  Many of the uninsured are concerned with cost, so awareness needs to be raised about tax credits for premiums and how to save on out-of-pocket costs (see Resources).  By sharing this information with our family, friends, and neighbors, we can help contribute to getting more people covered.

With continued efforts to educate and enroll the uninsured, forthcoming enrollment data will show progress in this area.  The primer concludes, “The ACA has provided coverage to millions of people in the United States in its first two years and has the potential to reach many more, ensuring that fewer individuals and families will face the health and financial consequences of not having health insurance.”