Which type of cost is typically necessary to pay before health insurance begins coverage?

The deductible is an essential aspect of health insurance, representing the amount that a policyholder must pay out-of-pocket for covered healthcare services before the insurance company starts to contribute to the costs. This means that the insured individual must cover their medical expenses up to the deductible amount before the insurance coverage kicks in and begins to pay for further medical services.

For many health insurance plans, meeting the deductible is a prerequisite for obtaining benefits, which emphasizes the significance of understanding this term. Once the deductible is met, the insurance typically begins to provide coverage, often requiring further payments through co-pays or coinsurance for individual services.

In contrast, premiums are payments made periodically to maintain the insurance policy, co-pays are fixed amounts paid at the time of service regardless of whether the deductible has been met, and out-of-pocket maximums represent the cap on total expenses an individual must pay in a year. However, these payments do not need to be made before coverage begins in the same manner as the deductible.