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

The term "deductible" in health insurance refers to the amount a policyholder is required to pay out-of-pocket for healthcare services before their insurance begins to cover costs. This means that before any benefits kick in, the insured must meet this specified threshold by paying for their own medical expenses.

For example, if a health insurance plan has a deductible of $1,000, the policyholder must pay that full amount for their medical care before the insurance company starts to contribute to expenses. This provision serves to share the cost burden between the insurer and the insured, encouraging responsible use of services.

Understanding the deductible is crucial for policyholders in managing their healthcare expenses and planning for potential out-of-pocket costs.