In a health insurance policy, what does the deductible refer to?

In a health insurance policy, the deductible refers to the amount that the insured must pay out-of-pocket for covered services before the insurance company begins to pay for expenses. This reflects the principle that insured individuals share some of the financial responsibility for their healthcare costs, incentivizing them to seek care judiciously and manage their health effectively.

When a policyholder incurs medical expenses, they are responsible for covering the expenses up to the deductible amount. Once this threshold is met, the insurance provider takes over and begins to share the costs according to the terms of the policy, such as through coinsurance or copayments. This mechanism helps control costs for insurers and encourages insured individuals to be mindful of their healthcare decisions.

The other options reflect different concepts within an insurance policy. The total amount that insurance will not cover typically pertains to limitations and exclusions rather than the deductible itself. A fixed dollar amount that the insured pays for a covered service, such as a copayment, refers to another cost-sharing structure, while the maximum out-of-pocket expense for the year relates to an overall cap on what an insured will pay for health services in a policy year, which is distinct from the deductible.