The rule: Save 2× your largest deductible as a dedicated “deductible fund.”
A deductible is the part you pay before insurance starts sharing costs. A clean fund for it keeps one bad day from turning into a cascade of worse choices (like skipping care or delaying repairs).
Here’s why this isn’t just vibes:
- 87% of covered workers with single employer coverage are in plans with a general annual deductible (KFF, 2024 Employer Health Benefits Survey: https://www.kff.org/health-costs/report/2024-employer-health-benefits-survey/).
- The average single deductible in those plans is about 2.1% of U.S. median household income (computed from KFF’s average deductible and the Census Bureau’s 2024 median household income) (KFF: https://www.kff.org/health-costs/report/2024-employer-health-benefits-survey/, U.S. Census Bureau: https://www.census.gov/library/publications/2025/demo/p60-286.html).
- 44% of U.S. adults say it’s very or somewhat difficult to afford their health care costs (KFF Health Tracking Poll, May 2025: https://www.kff.org/facade/cedb3fb/).
And a reminder of the hard stop your plan can impose:
“The most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance for in-network care and services, your health plan pays 100% of the costs of covered benefits.” (HealthCare.gov glossary: https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/)
Why the 2× rule works
Most people don’t get blindsided by a single “perfectly sized” expense. They get hit by timing.
The 2× buffer covers common real-life friction:
- You might face the deductible early in the year (before you’ve rebuilt savings).
- Two policies can trigger close together (think: auto incident plus a medical visit).
- You may need to pay the deductible before reimbursement, repairs, or scheduling happens.
Simple mental model: one deductible for the event, one deductible for the mess around the event.
Pocket card (save this)
Rule: Save 2× your largest deductible
Use when: One policy is the main risk; you can rebuild within a few pay cycles
Don’t use when: High coinsurance/out-of-pocket limit risk; multiple deductibles can stack
Adapt: Upgrade to the Safer Version below when your plan design can push you far past the deductible
Where the rule breaks
1) High coinsurance + high out-of-pocket limit
If you have meaningful coinsurance after the deductible, your “worst plausible year” can be much larger than the deductible.
HealthCare.gov lists Marketplace out-of-pocket limits for 2026; the individual cap is roughly 12.7% of U.S. median household income (computed from the listed limit and Census median income) (HealthCare.gov: https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/, U.S. Census Bureau: https://www.census.gov/library/publications/2025/demo/p60-286.html).
If your plan could realistically push you toward that cap, 2× deductible may be too small.
2) Two deductibles can hit in the same season
Example: homeowners deductible (storm damage) plus auto deductible (collision) plus a health deductible (injury follow-ups). The 2× rule assumes you’re unlikely to need multiple deductibles before you refill the fund.
3) Your deductible is a percentage of something big
Some policies use percentage deductibles (common in property/wind/hurricane contexts). If the deductible scales with a large insured value, “largest deductible” can jump fast—and 2× may become unrealistic unless you define a ceiling.
The safer version (still simple)
Safer Version Rule: Save the smaller of (2× largest deductible) and (your plan’s out-of-pocket limit), but never less than 5% of annual take-home pay.
Why this is safer:
- The out-of-pocket limit is your true worst-case for covered, in-network care in a plan year (HealthCare.gov: https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/).
- The 5% floor prevents under-saving when your deductible is deceptively “small,” but your cash flow is tight.
If you want one sentence to remember: 2× deductible—unless your out-of-pocket limit is the real monster.
Mini-scenarios (no currency, just math)
Scenario A: Straight deductible risk (good fit for 2×)
- Largest deductible = D
- You can replenish D within ~2 pay cycles
Fund target: 2D
Reason: one hit + one buffer while you rebuild.
Scenario B: Health plan where coinsurance makes the deductible irrelevant
- Deductible = D
- Out-of-pocket limit = L
- You have a plausible year where costs could push near L
Fund target: min(2D, L), but also ≥ 5% of annual take-home
Reason: once you’re in “big year” territory, L matters more than D.
Scenario C: Stacking risk (two deductibles before refill)
- Home deductible = H
- Auto deductible = A
- Refill speed is slow (more than ~4 pay cycles to rebuild one deductible)
Fund target: H + A (then add a buffer up to 2× max(H, A) if feasible)
Reason: the failure mode isn’t the size—it’s two events before recovery.
Common mistakes
- Saving for the deductible but ignoring the out-of-pocket limit. For many health plans, the deductible is only the opening act (HealthCare.gov: https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/).
- Treating “deductible fund” as the whole emergency fund. This fund covers one specific job: getting you through insurance cost-sharing without panic.
- Sizing it once and never revisiting after plan changes. Deductibles and limits can change year to year; your target should track the policy, not your memory.
- Forgetting stacking risk across policies. Your “largest deductible” might not be your “most likely pair of deductibles.”
Discover Monee - Budget & Expense Tracker
