Do I Lose Deductible When I Switch Health Plans?
Hello there,
We are considering moving to Michigan (I am here now helping.) Was wondering if we did transfer states if our deductible and copays already acquired would transfer if I do move. Thank you.
Answer
If you switch plans mid-year what you paid toward your deductible or out-of-pocket maximum will reset. This can be avoided with a multi-state plan.
This means that moving mid-year and having to change plans after paying a good bit into your deductible can be a major disadvantage.
As mentioned above, this can be avoided with multi-state plans or by staying on your current plan, but plans and cost assistance are region based making staying on the same plan difficult when moving (as you must apply for cost assistance through a state you live in). This means in practice most people who move or switch plans mid-year will simply forfeit their deductible.
If you have a major insurer who covers both states you can try talking to them to see if they have any suggestions, but at the end of the day you should expect that you will lose the money you have contributed toward your deductible or out-of-pocket maximum. Given this it may be smart to go with a high premium low deductible plan for the rest of the year.
This sounds really unfair, and sometimes that is the way it plays out. But consider this scenario from the insurers side of things: Someone gets a dirt cheap plan from insurer X, pays $1,000 out of pocket. Waits until the month before their plan resets to have a new plan start (December since all plans reset January 1st under the ACA), gets a new plan from insurer Y with a $1,000 out-of-pocket maximum and then get's super expensive surgery for free from insurer Y by transferring over the $1,000 of out-of-pocket costs paid toward their old plans maximum to insurer X. This loophole would spell big trouble for insurer Y and would be unfair to insurer Y and everyone on insurer Y's plan. Make sense? Somewhere there is a more elegant solution, but this is the way it is.
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Answer Rating:
Confusing response
Example: Switching company keeping the same policy.
Insurer keeps your deductible payments and you must start all over.
Another flaw that rewards the insurers and penalized the working people.
Sorry you found the response confusing, did a re-edit to try to make it read more clearly. The bottom line is that if you switch insurers or insurance plans you will lose the money you paid into cost sharing. That being said, it is possible to avoid this by getting a multi-state plan and then not switching the plan when moving out of state.
Your example of switching companies, but keeping a similar policy would on paper result in you losing the money you paid into cost sharing.
Does this also apply when a new policy is created because a dependent is added?
What if you don’t switch companies mid year; rather your company switches insurance providers. Shouldn’t the new providers have to credit your deductible and out of pocket that as already been met for the year?
In this situation you would still lose the amount you paid into cost sharing unless a different deal was worked out specifically for the employees.
My Oregon Health Insurance Co-Op just informed me that they’re closing MID-YEAR! I have MET my “Out of Pocket Expenses” for the rest of the year & now (MID-YEAR), I have to start ALL OVER AGAIN!
HOW is this even LEGAL for health insurance companies to close MID-YEAR, when most people have met their deductibles??? WHY DO WE HAVE TO PAY THE EXTRA THOUSANDS OF DOLLARS IN 2016? Where is our consumer protection?
That is very unfair. I’ll take note of this and look into it.
I didn’t see your follow-up response to the original Oregon inquiry.
An Illinois Coop Plan is also closing in 2016 before the end of the year. Does anyone know if the deductible will need to re-start during the period they let the 50,000 plan members change their insurance plan to another plan within the same state system???
What will happen if I change plan with the same company just a different plan from it will it affect me I’m not moving out of state
Generally you will lose cost sharing when you switch plans. To avoid (in some cases) this contact the insurer and coordinate the change.
Hi, I have a question here?
What if, I remove the dependent and add them later ( after 5 months) but want to keep the same plan. will the paid deductible towards the dependent will be continued or will re-set to $0 to begin when add them back? Please provide your solution. I tried to know an answer for this question and reached our Marketplace, Insurer, and State Health Insurance. but no clear information/regulation explained to me. Thanks in Advance!
Great question. I am not sure, but i’ll look into it. I would say that a family plan shares a deductible, so you should be able to add them on and off without a problem. However, this is only true if they qualify for special enrollment. Otherwise, open enrollment rules make it a non-issue (as you can’t enroll mid-year). I would say with special enrollment the answer would likely be yes, as coverage is guarantee issue and a family deductible is shared.
Are you telling me that AFTER I have met my $2500.00 deductible and $5000.00OOP co-insurance and my company closed and I lost my insurance I have to pay it again with another insurer????
The general rule of thumb is yes, but this doesn’t mean you don’t have any options. You may have the right to continue a similar plan with the same insurer. I would ask the employer and contact the insurer in this case.
I have a question. I had my own insurance supported by my ex-company. And my wife had her own obama care including my daughter in her plan. Recently I lost job and my wife tried to include me her own insurance plan as a dependent. But the agency said my wife had to change her plan due to the income change. And now she’s got her new plan with me and my daughter as dependents.
But the problem is she had apendix surgery beginning of this year and spent (not paid yet) out-of-pocket already. Now she’s got new plan (under same company) so in this case, deductible also will reset?
The rule of thumb, from what my research shows, is that deductibles will always reset. I would contact the insurer on this and ask if anything can be done. Let us know the outcome in the comments if you can!
My husband and I have been in business together for many years. We do not have any other employees, but have had continuous group insurance anyway. We were recently notified that our insurance company is cancelling our group insurance as of May 31 because we don’t have any common law employees. We plan to obtain a comparable individual policy with the same insurance company, but we have been told that will reset our deductible and out of pocket expenses, both of which are already at their maximums for the year. That does not seem fair at all. Is there anything we can do about it? It occurred to me that if they had cancelled our group insurance at the end of the year instead of on our renewal date, this problem would not have been an issue. It almost seems like they did this on purpose!
If I am covered under my employer’s Blue Cross plan and at my husband’s Open Enrollment drop my coverage and enroll as a dependent thru his employer’s plan with the same Blue Cross carrier – should they recognize the money I have paid towards my out-of-pocket maximum ?
Not necessarily. The contract for health insurance is per plan, not per provider. Although i’d always suggest that you should have this conversation with them. As private companies they are flexible.
My husband was laid off. Is the only way to NOT lose our deductible to use COBRA? Or can we sign up with a private plan through the same company and not lose the money we’ve paid toward our deductible?
I have a mulit-state plan but recently moved mid year. I have met my annual deductible and out -of pocket expense for 2016. Why do I have to start over? I pay my premiums on time, met my annual deductible, etc,. This multi-state policy (and all policies for that matter) are based on an annual participation by the policy holder and the insurer. If the policy holder has met their obligation to pay (premiums and deductibles) then isn’t the insurer required to indemnify this policy holder with claims for the remaining insurance year? PLUS, I have invested over 3 hours with the Marketplace and twice my call was dropped while awaiting transfer to a level or tier II specialist!!! I even made sure they had my phone number to call me back! What am I to do? Who is it that I ask to transfer the out-of pocket costs to my new plan – the new state or the state I left because that wasn’t clear in this reply. Once again, the low middle income citizen pays too much while the corp big business not only gets off lightly but gets my money and the Marketplace approves. If, in your scenario, you compared the percentage of outlay against the income or revenues derived – for both parties; insurer and policy holder, the low-middle class policy holder would not appear to “spell big trouble” for the new insurer. PLEASE HELP ME WITH THIS PROBLEM!
if I change jobs, switch to cobra under the same insurance company say HPN and after 90 days probation sign up of the new companies insurance and it is also HPN does the deductible and out of expenses carry over since during the year I have always had and paid all costs to HPN? While the deductible amount and maximum out of pocket amounts could change based on the policy I understand but since all coinsurance, copays and deductibles have been paid to the same insurance company shouldn’t they carry over?
My insurance Co on exchange closed midyear, and I had to go with a different Co on exchange. I had met almost half of my deductible, and now I have to start over, plus the new Co premium is $95 more per mo for same coverage. It was not my choice to change midyear, but I’m still left out in the cold…paid tons of money on premium, plus deductible, and very little in return.
My cobra ending, UHC says even if i get short term cov through them, deductible voids and start over, even with a UHC policy. Why is that. I was covered under WI employer, said only if I resided in WI, which I didn’t even when I worked for them
My daughter turned 26 on May 14, 2016 and was dis-enrolled in my employer group health insurance plan. However, my employer hired her 9 days later and on May 23, 2016 she was enrolled back into the employer group plan medical coverage. She had already met her $1200.00 deductible under this group plan for 2016, now she is being charged another $1200.00 deductible again under the same group plan. Is this correct?
Well written, to the point, and very helpful….I changed Medicare Advantage plans August 1 of 2016, but stayed with the same Insurer(UHC)..In first plan was in catastrophic stage(have extra help). Will I have to start all over with Out of Pocket Expenses even though I remained with same insurer? I know my extra help has carried over to the new plan…Please assist me in answering the above question…Your input will be much appreciated, Sincerely George from Green Bay Wi
Thank you for the kind words.
To your question: Yes, you will typically have your deductible reset even if you stay with the same insurer. The best thing to do is to contact them and ask them directly about this sort of thing.
My wife and I worked for the same company but carried two individual plans versus a 2-person plan. We had the same plan in the same group, just different member IDs. The plan is a high deductible HSA. My wife trialed a job at a different division in the company for 61 days which offered different insurance with a different carrier. The job did not work out and she has decided to stay home with the kids. She has joined my plan as a dependent with the original insurance company. Can the original insurance company credit her calendar year deductible so that she does not have to start over? It is an employer-funded plan and my employer is reluctant to do it because they think it may be illegal. Why is it illegal to credit the deductible for the same person with the same plan and group during the same calendar year?
What happens if an individual terms within a 2 person contract which changes the coverage from family to individual? Since the contract status changes from a family to individual contract, does the remaining individual get credit for the termed members accumulation?
Similarly, if an individual terms within a 4 person contract, does the family deductible/out-of-pocket accumulation include the termed members accumulation? Or, in both scenarios, does the total accumulation only include the active members deductible/out-of-pocket costs?
This is always a question for the insurer, but as a rule (from my research) you keep the deductible if you don’t change plans, but lose it if you do. Going from an individaul to family plan is changing plans, but going from a family to family isn’t.
However, it has always seemed to me like if one stuck with the same insurer that there would be wiggle room. I don’t think it is general policy, but in general if you make honest attempts and communicate with your insurer they will typically work with you. For instance, most appeal attempts I’ve seen have been successful despite plan drops being more common than i’d like to see… but this is another subject.
So general rule of thumb, any plan change that isn’t adding or removing a family member is likely to result in losing a deductible. ALWAYS contact the insurer before making any changes, they have the final say beyond the explicit rule-sets.
Here’s a problem that I’m dealing with now. I’m 65 and going to Medicare in August. My family’s health insurance deducible is resetting for my wife and son. They are staying on the same plan, just I’m being taken off and my wife is getting a new ID – which resets it all!! I’m trying to fight this because she had cancer first part of the year and I paid her deducible of $6,650. Now I will have to start all over again next month. That is unfair CareFirst of Maryland.
Wow really??
“Someone gets a dirt cheap plan from insurer X, pays $1,000 out of pocket. ”
I have a $5,000 PER FAMILY MEMBER deductible that costs me $800 a month ! I’d love to only pay $1,000 .. Dirt cheap with a$1,000 OOP WhooWee I wish!
My husbands company had our insurance provider as BCBS. We met my husbands deductible of $5000 and out of pocket amount of $3500. I met $1700 of my $5000 deductible and $1500 of my $3500 out of pocket. On September 25 2017, we were informed that our insurance provider would be changing to a totally different company effective October 1 2017. Basically we had 6 days notice before the switch. My question is, does the new insurance provider have to give us credit for the amount of the deductible we had met with BCBS? Also, if according to the ACA all insurance start dates are January 1, is BCBS still responsible for our medical bills thu the end of the year?
In general: The insurer you hold a contract with is responsible for for costs in every day of every month in which you hold the contract. Meanwhile, deductibles do not however have to be transferred between insurers.
With that said, you should call and talk to the insurer directly to better understand the situation. If the insurer transferred plans or arranged with the new insurer in some way, then it could be that the arranged for deductibles to be carried over as well. In this case they essentially broke contract with you, not the other way around. Thus, it could be that special rules apply.
I was living in Seattle, had Kaiser Permenente insurance. I moved to Sequim of Clallam County, WA, in June 2017. In January 2018 KP informed me that I was no longer in their coverage area, that I needed new insurance. I switched to LiseWise of WA. I have a new insurance policy since 2/1/2018. QUESTION: my paid deductible from January….is it lost? This was a forced switch. I was happily driving to my previous in network providers after my move. They forced me to cancel Kaiser Permenente ? They could of advised me in August 2017 that I was going to have to switch companies. They waited until 1/13/18 to send me a letter of termination. FYI I am a cancer patient.
Issues like this should be dealt with as early as possible and may require appealing. I would contact both the exchanges you made the switch through and the insurers.
I have been a dependent on my husbands Obamacare plan. He turned 65 and had to go to Medicare. The insurance company had to issue me my own policy because there was no way to just delete him. I have the same insurance company, the same policy with the same $7000 deductible and coverage. The only thing that changed was the policy number. They are telling me that I lost all deductibles paid on the previous policy. My husband had to meet a $7000 deductible, and I had to meet my own $7000 deductible, why can’t they take my deductible and apply it to the new number, again same insurance company, same insurance.
I am on Cobra with ex employer as I have become permanently disabled. Do they have the right to pressure me off their insurance. Am I not protected by Cobra. Also they are changing insurance companies mid year in August. I have reached my out of pocket and deductible. Will this carry over or will I have to start all over again for the last few months.
I am almost positive that you can’t be kicked off of COBRA for any reason other than non-payment as long as are within the maximum month coverage limit (typically 18 months; can be up to 36).
You can however be kicked off if your employer stops offering coverage.
However, you cannot be kicked off just because they are switching insurers, they have to offer you coverage under the new plan.
Here is the annoying thing though, if your employer is switching insurers mid-year, this could lead to you losing out on your maximums and deductibles and having to start again.
So essentially, you are protected, but by switching plans your employer could still end up putting you in a tight spot if you have to also switch plans.
All that said, this is sort of a complex situation, and I’m only relaying what I have researched. It is always smart to check with your insurer, check with the DOL (https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra), ask human resources, etc.
My girlfriend recently had an issue where her insurance company ended one plan and switched to another plan 15 days after the annual renewal. She hit her max out of pocket in the first 15 days, and then the insurance is charging her another max out of pocket. Nothing changed, she was with the same company, same insurance company, they just ended the insurance offering and switched her plan.
Is the insurance company allowed to do this and not recognize what she has already paid in the first 15 days? How would we appeal/fight this? We have tried many avenues, but had no success.
This doesn’t seem right, and thus I would appeal it. I may be missing a detail or rule here, but the appeals process will turn that up if it is the case. https://obamacarefacts.com/appeal-health-insurance-company-or-marketplace-decision/
Hello,
I have a similar question, my wife’s company changed insurance companies mid-year (including dental and eye insurance). I had a root canal done while under the one insurance company, but before I could have the crown work done they changed insurance companies. The second insurance company said they would not cover the crown because the root canal done under the previous insurance company was covered with the $1,500 annual deductible. Shouldn’t the crown be partially covered based on changing to a new insurance company mid-year or is this just wishful thinking.
Unfortunately, deductibles/maximums are by plan only, they don’t carry over when you switch plans. With that said, it is unfortunate that it works this way as it can feel pretty unfair especially when you are forced to change plans.