What is a deductible in health insurance?

A deductible in health insurance refers to the specific amount of money that a policyholder must pay out-of-pocket for healthcare services before their health insurance begins to cover its share of the costs. This amount is predetermined by the insurance policy. Once the deductible is met, the insurance company starts to pay for covered services, although the insured may still be responsible for copayments or coinsurance depending on the policy terms.

In this context, the total annual premium for the policyholder reflects the regular payment made to maintain the insurance policy and does not affect out-of-pocket expenses related to deductibles. The percentage covered by the insurance after a claim pertains to the coinsurance aspect, where after meeting the deductible, the insurer pays a set percentage of the remaining costs, and the policyholder bears the rest. Lastly, the maximum limit on insurance payout for a given incident relates to the cap on insurance claims, which is a separate concept that delineates coverage limits, rather than the initial out-of-pocket expense that triggers coverage.

Understanding the concept of a deductible is crucial, as it influences how individuals manage their healthcare expenses and the utilization of their health insurance coverage.