What is a set amount that must be paid by the patient before the insurer will cover additional expenses?

The amount that must be paid by the patient before the insurer covers additional expenses is known as a deductible. This is a specific sum established in an insurance plan that represents the initial cost a policyholder must pay out-of-pocket for healthcare services before their health insurance begins to contribute.

For example, if a deductible is set at $1,000, the patient must pay the first $1,000 for covered healthcare services before the insurance provider starts to pay for further expenses. This system is designed to share the costs between the insurer and the insured, encouraging the patient to be more mindful of their healthcare expenses, as they will incur costs until they reach the deductible limit.

The other terms, such as copayment, co-insurance, and premium, denote different structures of cost-sharing within insurance plans. A copayment is a fixed fee that the patient pays at the time of service, typically for specific services or medications. Co-insurance is the percentage of costs that a patient pays after meeting the deductible. A premium is the amount paid periodically to maintain the insurance coverage, irrespective of whether healthcare services are utilized. Thus, understanding the function of a deductible is crucial for navigating health insurance plans.