What does a deductible in health insurance refer to?

A deductible in health insurance represents the amount an insured individual must pay out-of-pocket for healthcare services before their insurance begins to cover costs. This feature is designed to protect the insurer from having to pay for all low-cost medical expenses while encouraging individuals to be mindful of healthcare spending. Once the deductible is met, the insurance policy typically starts to pay a portion of the covered healthcare services, which aligns with the purpose of insurance: to share the risk of high costs.

The other options do not accurately define a deductible. The maximum amount an insurance will pay refers more to a policy limit rather than the deductible itself. The percentage of costs you pay for care typically relates to coinsurance, which occurs after the deductible has been satisfied. Lastly, the overall cap on insurance coverage pertains to the maximum limit of the insurance policy as a whole, distinct from the out-of-pocket expenses represented by the deductible.