In health insurance policies, what is the definition of "deductible"?

In health insurance policies, a deductible is defined as the fixed amount that a policyholder must pay out-of-pocket for healthcare services before the insurance coverage kicks in. This means that before the insurance company starts to pay its share, the insured must first reach this specified amount. The purpose of a deductible is to share the costs between the insurer and the insured, incentivizing the policyholder to be mindful of healthcare expenses.

For example, if a health insurance policy has a deductible of $1,000, the policyholder must pay $1,000 of their medical bills themselves before the insurer starts to cover costs. This mechanism helps reduce the number of minor claims, allowing insurers to maintain lower premium costs.

The other options do not accurately define what a deductible is in the context of health insurance:

• The total amount covered by the insurance company refers to the policy limit, not the deductible.
• The percentage of costs one must pay for healthcare services describes coinsurance or copayment, which are different components of a health insurance policy.
• The amount of money refunded to the policyholder after a claim does not correspond to the definition of a deductible and is not a standard insurance term used in health insurance policies.