AHIP Practice Exam

The term 'deductible' in health insurance policies refers to the specific amount that a policyholder must pay out-of-pocket for healthcare services before their insurance plan starts to cover any costs. This means that for many types of medical expenses, the insured individual is responsible for all the costs until they have paid the full deductible amount. Once this threshold is met, the insurance company will begin to pay a portion of the costs, according to the terms laid out in the policy.

Understanding the deductible is crucial for beneficiaries because it directly affects their out-of-pocket expenses and can influence their healthcare decisions. It's important to differentiate this from other terms within health insurance, such as premiums—the regular payments made to maintain coverage—or out-of-pocket maximums, which cap the total amount a policyholder has to spend in a given year. The deductible serves as a barrier that must be overcome before the insurer contributes to further costs.