What role does the deductible play in a health insurance policy?

The deductible in a health insurance policy is a specific amount of money that the insured must pay out-of-pocket for healthcare services before the insurance coverage kicks in to pay for additional expenses. This means that if a policyholder incurs medical costs, they must first meet their deductible before their insurance provider will contribute to the expense.

For instance, if an individual has a deductible of $1,000, they will need to pay the first $1,000 of their medical bills themselves. Once this amount is paid, the health insurance policy typically starts to cover a portion of the costs based on the terms of the plan. This structure helps to lower the overall costs of premiums and encourages the insured individuals to be more mindful of their healthcare spending since they are sharing some of the costs before their coinsurance or copayment begins.

The other options refer to different aspects of a health insurance policy. The maximum coverage available pertains to the cap on benefits that an insurer will pay for a claim, while the benefit limit per service relates to specific limits on various types of healthcare services. The total premium cost is the amount paid for the insurance policy itself, which isn’t linked to the out-of-pocket costs incurred before coverage begins. Understanding the role of deductibles helps policyholders