What is the term for the amount of money a patient pays out of pocket before insurance payments for healthcare services?

The term for the amount of money a patient pays out of pocket before insurance payments begin for healthcare services is known as a deductible. This is a specific amount that the insured must meet annually before their health insurance starts to pay for covered medical expenses. Understanding the deductible is crucial because it represents a significant upfront cost that patients need to manage before receiving any insurance benefits.

In most health insurance plans, patients must satisfy this deductible before the insurer will cover additional costs for medical services. For example, if a patient's deductible is $1,000, they must pay that amount themselves for healthcare bills before their insurer contributes to further expenses.

This concept is essential in managing healthcare costs, as it influences both how patients seek services and how they budget for medical expenses. It contrasts with premiums, which are the regular payments made to maintain insurance coverage, and co-payments, which are fixed amounts paid for specific services or medications after the deductible is met. The out-of-pocket maximum represents the total cap on what a patient has to spend in a given year, including deductibles, co-payments, and coinsurance, beyond which the insurance covers 100% of additional costs.