What is the meaning of a deductible in health plans?

A deductible in health plans refers to the amount of money a policyholder must pay out of pocket for healthcare services before their health insurance begins to cover the costs. This means that if the total medical expenses are less than the deductible, the insured individual is responsible for paying those costs entirely. Once the deductible is met, the insurance company typically starts to share the costs of covered healthcare services, which may involve copayments or coinsurance.

Understanding this concept is crucial because it helps individuals make informed decisions about their healthcare expenses and the upfront costs they may face before their insurance benefits kick in. The deductible plays a significant role in determining an individual's overall healthcare spending and will influence choices about health plans.