In health insurance, which component indicates the amount the insured must pay before the insurance starts covering costs?

The deductible is a specific amount that the insured must pay out-of-pocket for healthcare services before their health insurance begins to cover costs. It sets a threshold that needs to be met before the insurer's coverage kicks in. For instance, if a plan has a deductible of $1,000, the insured would need to pay the first $1,000 of medical expenses themselves. Once this amount is satisfied, the insurance policy typically starts to pay its share for subsequent medical services.

In contrast, the copayment is a fixed amount that the insured pays for specific services at the time of care, coinsurance refers to the percentage of costs that the insured pays after the deductible has been met, and the out-of-pocket maximum is the maximum total amount the insured will have to pay for covered services in a policy period, after which the insurance pays 100% of covered costs. Understanding the role of the deductible is crucial for managing healthcare expenses effectively within a health insurance plan.