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

The term 'deductible' in health insurance specifically refers to the amount that an insured individual must pay out-of-pocket for healthcare services before their insurance begins to cover the costs. This means that until the policyholder has paid this specified amount, they are responsible for any bills incurred for medical treatments. Once the deductible has been met, the insurance company will start to pay its share of covered expenses, providing financial assistance for the recipient's medical care.

Understanding the concept of the deductible is crucial for patients as it impacts budgeting for healthcare expenses; knowing how much they need to pay upfront before receiving benefits can help individuals plan their healthcare spending accordingly. This aspect of health insurance is vital for managing overall costs and understanding the terms of coverage.