What does the term 'deductible' refer to in health insurance?

The term 'deductible' in health insurance specifically refers to the amount that an individual must pay out-of-pocket for healthcare services before their insurance begins to provide coverage. This means that if, for instance, a health insurance policy has a deductible of $1,000, the insured person must cover the first $1,000 of their medical expenses themselves. Once this amount has been paid, the insurance coverage kicks in and starts to pay for a portion of the subsequent medical costs, depending on the specific terms of the insurance policy.

This is distinct from other terms related to health insurance costs. For example, the total out-of-pocket expense encompasses not just the deductible but also any copayments and coinsurance amounts the insured would have to pay throughout the policy year. The percentage of costs shared after the deductible is met refers to coinsurance, which describes how the remaining costs are split between the insurance provider and the individual once the deductible has been satisfied. Lastly, the fixed amount paid for services relates to copayments, which are predetermined fees paid for specific services or visits and occur at the time of service rather than being accumulated as part of a deductible.