What does the term “deductible” mean in a health insurance policy?

The term "deductible" in a health insurance policy refers to the amount a patient must pay out of pocket for healthcare services before their insurance coverage begins to contribute. This means that if an individual has a deductible, they need to spend a certain amount on eligible medical expenses each year before their insurer will start paying for covered services. This structure is designed to encourage patients to utilize healthcare services responsibly and can help lower insurance premiums.

In contrast, the other options describe different components of an insurance plan. The total cost of the insurance premium refers to what the policyholder pays to maintain their health insurance policy. The percentage covered by the insurance policy would relate to co-insurance, which is the portion of costs the policyholder shares with the insurer after the deductible is met. Finally, the maximum amount the insurance will pay in a year refers to the out-of-pocket maximum, which is the cap on what a person would have to pay for covered services within a set timeframe, typically a year. Understanding these distinctions helps clarify the role and significance of the deductible within health insurance policies.