What is a deductible in terms of health insurance?

A deductible in the context of health insurance is the amount a policyholder must pay out-of-pocket for healthcare services before their insurance coverage starts to pay. This means that before the insurance company begins to contribute to claims, the individual must cover the deductible amount on their own.

This concept is crucial for understanding how insurance plans work, as it affects how much an individual will be responsible for in terms of initial medical expenses. Once the deductible is met for the plan year, the insurance typically begins covering a larger portion of subsequent costs, subject to any co-insurance or co-payments that may still apply.

The other choices represent different concepts related to health insurance but do not define what a deductible is. The total cost covered by insurance refers to what the insurance pays after the deductible is met. The monthly fee for an insurance policy is known as a premium. The percentage of shared costs refers to co-insurance, which is the portion of expenses that the insured pays after the deductible has been met. Understanding these terms is essential for managing personal healthcare expenses and making informed decisions about health insurance coverage.