This is general information, not insurance, medical, legal, or financial advice. How plans treat accumulated costs differs by insurer, employer, and location, so check your own plan documents.
Most health plans track what you have paid during a plan year toward two numbers: the deductible, which is what you pay before the plan starts sharing costs, and the out-of-pocket limit, which caps your yearly spending on covered care. When you switch plans in the middle of a year, those running totals usually belong to the old plan. The new plan often starts counting from zero.
Why the totals reset
A deductible is a feature of a specific contract between you and an insurer. The new plan, especially from a different insurer, usually does not see or honor what you paid under the old one. Each plan also defines its own year. Some run on the calendar year, while others follow a plan year that starts at another time, such as the employer’s renewal date. So a switch can mean the old year’s progress ends and the new plan’s clock starts, even if it is only a few months in.
Our article on understanding your deductible and out-of-pocket costs explains the terms, and the page on the out-of-pocket maximum covers the cap.
A hypothetical example
These numbers are invented to show the idea.
Suppose your old plan has a $1,500 deductible. By the end of June you have had treatment and have paid $1,200 of it toward that deductible. In July you switch to a new plan with a $2,000 deductible. If nothing carries over, you start the new plan with $2,000 still to pay before standard cost sharing begins. Across the year, you would have paid $1,200 + $2,000 = $3,200 in deductible-type spending before the plans began sharing costs, compared with $1,500 had you stayed on the old plan the whole year, assuming the same care and ignoring premiums and other cost sharing.
The same applies to the out-of-pocket limit. If you were close to the cap on the old plan, you could lose that protection and face a fresh cap on the new plan. This does not mean switching is a mistake. It means the reset should be counted when you weigh the benefits.
When carry-over may happen
There are exceptions, and they depend on the rules where you live and on the plan itself.
- Some employers that change insurers in the middle of a year may arrange for the new insurer to credit amounts already paid. This is more common in group settings and is not guaranteed.
- Some changes within the same insurer, such as moving between plans of the same company, may keep some or all of your totals.
- Some transitions in specific programs may have special rules.
The way to learn is to ask directly: “Will amounts I paid toward the deductible and out-of-pocket limit this year under my current plan count toward the new plan?” Ask for the answer in writing, and keep your old plan’s statements, since a new insurer may ask for proof if credit is possible. Your explanation of benefits statements are a good source for this record.
Other things that reset or change
- Family deductibles. If you cover others, each person’s progress and the overall family total can be affected. See our article on family deductibles.
- Prior approvals. An approval that you obtained under the old plan may not be recognized by the new one, so a planned procedure may need a new prior authorization.
- Prescription costs. Drug tiers and approved lists differ, so a medication that was cheap may cost more or require new approvals.
- Account contributions. Annual limits on health savings accounts or flexible spending accounts can interact with a mid-year change, and the rules for them depend on your account type and location.
- Provider networks. A new network may not include your usual doctors, which could push you into out-of-network care.
Timing a switch
If you have a choice, consider when the switch happens. Some people prefer to change at a renewal date, or during open enrollment, so that the new year starts fresh anyway. Others may have a reason to move mid-year, perhaps after a qualifying life event, a move, or the loss of other coverage, and the reset is simply a cost of that change. If you are scheduled for major care, it may be worth asking whether the timing of a procedure and the switch could affect what you pay. Treat this as a question for the insurer or a licensed professional, because a change of timing is not always practical or medically appropriate.
Questions to ask
- Does the new plan credit what I already paid this year?
- When does the new plan’s year begin and end?
- Is my doctor in the new network, and are my prescriptions covered?
- Do any approvals I have carry over?
- What is the new deductible and out-of-pocket limit, and how does that compare with my remaining amounts on the old plan?
Comparing the remaining amounts, rather than the headline numbers alone, gives a more accurate picture of what the switch might cost.