What does a deductible represent in a health insurance plan?

A deductible is a specific amount that an insured person must pay for healthcare services before their insurance plan begins to cover the costs. In simpler terms, it’s the threshold that must be met to trigger the insurance company's payment for medical services. For instance, if an individual's deductible is set at $1,000, they would need to pay that amount out of their own pocket for covered healthcare expenses before their health insurance kicks in and starts to pay for further services.

When considering the other options, they respectively refer to different aspects of health insurance. The first choice relates to copayments, a fixed fee paid for certain types of visits or prescriptions. The second choice pertains to the overall out-of-pocket maximum, which is the most a policyholder would have to spend on covered services in a plan year. The last option describes coinsurance, which is a percentage of costs for services that the insured pays after meeting their deductible. Each of these terms has its own distinct meaning and function within a health insurance context, highlighting how essential it is to understand what a deductible specifically means in relation to overall healthcare costs.