What does “deductible” mean in health insurance terms?

In health insurance terminology, "deductible" refers to the specific amount that a policyholder is required to pay out-of-pocket for healthcare services before their insurance coverage begins to take effect. This means that before the insurance company starts to reimburse any medical costs, the individual must first meet this predetermined annual threshold. For example, if a policy has a deductible of $1,000, the insured will need to incur $1,000 in medical expenses, which they will pay entirely out of their own pocket. Only after this amount has been met will the insurance provider begin to pay for covered services according to the terms of the insurance policy.

This concept is crucial for understanding how out-of-pocket costs work in conjunction with health insurance plans, as it influences both the overall expenses incurred by the policyholder and the timing of when insurance benefits are received.