What is the function of a deductible in a health insurance policy?

A deductible in a health insurance policy serves as the amount that a policyholder must pay out-of-pocket for healthcare services before their insurance begins to cover any additional costs. This mechanism helps control premiums by encouraging insured individuals to share in the costs of their healthcare. Once the deductible is met, the insurance typically begins to pay for a larger portion of the medical expenses according to the terms of the policy.

Understanding the role of the deductible is essential for consumers as it directly impacts their out-of-pocket expenses and how quickly they can receive financial assistance from their health insurance provider. It emphasizes the shared responsibility model within health insurance, where both the insurer and the insured contribute to healthcare costs.

The other options do not accurately describe the function of a deductible. For instance, the total cost of care covered by insurance concerns the comprehensive benefits offered by a policy, which is distinct from the deductible. A fixed fee for every healthcare visit pertains to copayments rather than deductibles, and the maximum coverage limit per year refers to the cap on what the insurer will pay, which is unrelated to the notion of the deductible.