What does the term "deductible" refer to in health insurance?

The term "deductible" in health insurance refers specifically to the amount that policyholders must pay out-of-pocket for covered services before their insurance plan begins to pay. This means that if a policyholder has a deductible of $1,000, they need to incur $1,000 in medical expenses on their own before the insurance company will start covering costs. The deductible is a key component of many insurance plans, as it helps to control costs and encourages responsible spending by insured individuals.

In understanding this concept, it becomes clear why the other options do not accurately define a deductible. The total amount paid by insurance for a claim relates to the benefits provided and is not the same as the initial amount the policyholder must cover. Insurance premiums, which are the amounts paid periodically to maintain coverage, are not linked to the deductible directly, as they represent a cost of purchasing insurance rather than the out-of-pocket expenses before coverage applies. Lastly, the maximum limit of insurance coverage refers to the cap on how much an insurer will pay for a covered health expense, which is distinct from the initial expenses that must be covered by the insured through their deductible.