In a health insurance plan, what does the deductible mean?

• A. An annual limit on out-of-pocket costs
• B. The amount you pay out of pocket for covered services before the insurance starts to pay
• C. A fixed monthly premium
• D. A percentage of costs the insurer pays after deductible

Answer: (B)

A deductible is the amount you pay out of pocket for covered services before the insurance starts to pay. It’s separate from your monthly premium, and it usually resets each plan year. Once you’ve met the deductible, you typically share costs with the plan through coinsurance or copays, and the insurer covers the rest until you reach the out-of-pocket maximum.

The other concepts are different: the out-of-pocket maximum is the total limit on what you pay in a year; the monthly premium is what you pay just to have the plan; coinsurance is the percentage of costs you pay after meeting the deductible.