AHIP Practice Exam

The term "deductible" in health insurance specifically refers to the amount that a policyholder must pay out of pocket for healthcare services before their health insurance begins to pay. It is an essential component of many health insurance plans, acting as a financial threshold that must be met in a given policy period, often a calendar year.

When an insured individual incurs medical expenses, they are responsible for covering those costs up to the deductible amount. Once the deductible has been satisfied, the insurance company will start to contribute to the costs of covered services according to the terms of the policy, which often include co-pays, coinsurance, and coverage limits.

Understanding the deductible is crucial for policyholders as it helps them anticipate their potential out-of-pocket expenses for the year and plan accordingly for their healthcare needs. This understanding also highlights the importance of reviewing one’s health insurance plan to determine how deductibles, premiums, and other costs fit into their overall financial budgeting for healthcare.