What is an insurance deductible?

Prepare for the Business of Healthcare and Health Policy Test. Study with multiple choice questions and explanations to ace your exam!

Multiple Choice

What is an insurance deductible?

Deductible is the amount you must pay out-of-pocket before your health plan starts to pay for covered services. It is different from the monthly premium you owe to maintain coverage, and it is not a fixed copayment you make for a single service. It also isn’t the percentage of costs the insurer covers after you meet the deductible (that percentage is coinsurance). Once you’ve paid enough to meet the deductible, the insurer begins to share costs according to the plan’s rules (often with further coinsurance until you reach the out-of-pocket maximum). For example, with a $1,000 deductible, you pay the first $1,000 of covered expenses in a year; after that, the plan helps pay. Copays remain separate fixed amounts for specific services regardless of the deductible.

Deductible is the amount you must pay out-of-pocket before your health plan starts to pay for covered services. It is different from the monthly premium you owe to maintain coverage, and it is not a fixed copayment you make for a single service. It also isn’t the percentage of costs the insurer covers after you meet the deductible (that percentage is coinsurance). Once you’ve paid enough to meet the deductible, the insurer begins to share costs according to the plan’s rules (often with further coinsurance until you reach the out-of-pocket maximum). For example, with a $1,000 deductible, you pay the first $1,000 of covered expenses in a year; after that, the plan helps pay. Copays remain separate fixed amounts for specific services regardless of the deductible.

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