What is the definition of deductible in a health insurance policy?

The deductible in a health insurance policy is defined as the amount that the insured is required to pay out-of-pocket before the insurance company starts covering the costs of medical services. This amount must be met within a specified period, usually annually, before any benefits are activated for services received.

Understanding how a deductible works is crucial for policyholders as it affects their overall healthcare expenses. For instance, if a health insurance plan has a deductible of $1,000, the insured must pay for the first $1,000 of their medical expenses before the insurance coverage kicks in. After this amount is reached, the insurer will start to pay for covered services according to the policy details.

In contrast, some of the other options describe different aspects of health insurance. A fixed amount paid per visit pertains to copayments, which are separate from deductibles. The total annual health expenses calculation does not directly relate to the deductible but is rather an overall assessment of healthcare costs. Lastly, the percentage of costs covered after the premium is paid refers to the coinsurance aspect, which applies to costs after the deductible has been met.