How does a calendar-year deductible differ from a lifetime deductible?

How does a calendar-year deductible differ from a lifetime deductible?

• A. Lifetime resets yearly
• B. Calendar year resets yearly
• C. They refer to HSAs
• D. No difference

Answer: (B)

A calendar-year deductible resets every calendar year. It sets the amount you must pay out of pocket for covered services within that year before the plan starts paying benefits at the coinsurance level. Once that year ends, the deductible amount resets to zero on January 1, and you must meet the deductible again for new charges in the new year. A lifetime deductible, by contrast, accumulates once over the life of the policy. You must pay a total deductible amount once, and after that point, you typically don’t owe further deductible charges for the remainder of the policy term (unless the policy changes). For example, if the calendar-year deductible is $2,000, you might pay up to $2,000 in one year, and then benefits kick in; next year you start over at zero. If there were a lifetime deductible of $5,000, you would accumulate payments toward that $5,000 across years until it’s met, after which no additional deductible would be required for the rest of the policy.

A calendar-year deductible resets every calendar year. It sets the amount you must pay out of pocket for covered services within that year before the plan starts paying benefits at the coinsurance level. Once that year ends, the deductible amount resets to zero on January 1, and you must meet the deductible again for new charges in the new year.

A lifetime deductible, by contrast, accumulates once over the life of the policy. You must pay a total deductible amount once, and after that point, you typically don’t owe further deductible charges for the remainder of the policy term (unless the policy changes).

For example, if the calendar-year deductible is $2,000, you might pay up to $2,000 in one year, and then benefits kick in; next year you start over at zero. If there were a lifetime deductible of $5,000, you would accumulate payments toward that $5,000 across years until it’s met, after which no additional deductible would be required for the rest of the policy.