What is a "deductible" in health insurance?

A "deductible" in health insurance is defined as the amount a policyholder must pay out-of-pocket for covered healthcare services before the insurance company starts to pay. This means that when an individual seeks medical care, they are responsible for paying all the costs associated with that care until they reach their deductible limit. For example, if a person's deductible is $1,000, they must incur that amount in medical expenses before their insurance provider begins to contribute towards their healthcare costs.

This structure is designed to share the risk and expense of healthcare between the insurer and the insured, encouraging policyholders to be more mindful of their healthcare spending. The deductible is an important concept in health insurance because it directly impacts how much the insured will ultimately pay for services in a given coverage period.

By understanding the function of a deductible, policyholders can make more informed decisions about their healthcare and insurance coverage.