In health insurance, what is a deductible?

A deductible is defined as the amount that an insured individual must pay out-of-pocket for healthcare services before their health insurance plan begins to cover the costs. The purpose of a deductible is to encourage individuals to share in the cost of their healthcare and to prevent unnecessary medical expenses. In practice, if a person has a deductible of $1,000, they will need to pay that full amount for eligible medical expenses before their insurance starts to pay its share.

The other definitions provided in the options relate to different concepts in health insurance. For instance, the percentage the insured must pay for medical expenses refers to coinsurance, which is a cost-sharing measure once the deductible has been met. The total amount an insurer pays for claims in a year pertains to claims limits or total payout, which is separate from how deductibles function. Lastly, the fixed amount paid for each medical visit describes a copayment, which is another form of cost-sharing but not a deductible. Understanding these distinctions is crucial for navigating health insurance policies effectively.