What is a deductible and how does it work?

A deductible is the amount a person must pay out-of-pocket for healthcare services before their insurance coverage kicks in. Think of it as the initial cost responsibility that an individual must bear. Let's say a policy has a $500 deductible. When someone requires medical care, they will be responsible for paying the first $500 of the expenses. Once they have met the deductible, their insurance plan will start covering a percentage of the costs, typically through copayments or coinsurance. However, it's important to note that certain services, like preventive care or annual check-ups, may be covered in full without requiring the deductible to be met. Deductibles can vary based on the health plan, and often higher deductibles mean lower monthly premiums, providing individuals with a trade-off.