What does a deductible refer to in health insurance?

A deductible in health insurance represents the amount an insured individual must pay out-of-pocket for healthcare services before their insurance coverage starts to pay. This concept is crucial for understanding how health insurance policies operate, as it establishes the initial financial responsibility of the policyholder.

When someone enrolls in a health insurance plan, they may face a deductible that must be met each year. For instance, if a plan has a deductible of $1,500, the insured must cover this amount for eligible medical expenses before their insurer begins to provide financial assistance with further costs. This typically applies to various services, including hospital visits, surgeries, or medical procedures.

Understanding the role of a deductible helps individuals budget for healthcare expenses and navigate their insurance plans effectively. It also influences decisions about seeking care, particularly for those who are managing chronic illnesses or anticipating medical needs throughout the year.