What does the deductible refer to in health insurance?

The deductible in health insurance is defined as the amount a patient must pay out-of-pocket for healthcare services before their insurance begins to cover additional medical expenses. This is a key concept in how health insurance functions, as it sets a threshold that patients must meet before receiving benefits from their insurance policy. For example, if a plan has a $1,500 deductible, the patient needs to incur $1,500 in medical expenses before the insurer starts to contribute to the costs of further care.

Understanding this helps individuals plan for their healthcare expenses, as they will need to budget for this initial outlay before their coverage kicks in. It also emphasizes the shared responsibility between the insurer and the insured in managing healthcare costs. This prompts patients to be mindful of their medical expenses, as they are responsible for all costs until their deductible is met.