The amount an insured patient must pay toward claims each year before the insurance company starts covering medical treatment is called what?

The amount an insured patient must pay toward claims each year before the insurance company begins to cover medical treatment is referred to as the deductible. This payment is a predetermined amount set by the insurance policy, and it needs to be met annually before the insurer pays for any further covered health services. The purpose of the deductible is to share the costs of healthcare between the insured individual and the insurer, incentivizing patients to consider the cost of their medical care.

In contrast, a co-payment is a fixed amount the patient pays for specific services at the time of receiving care, but it does not contribute toward meeting the deductible. The premium is the amount paid for the insurance policy itself, typically on a monthly basis, and is unrelated to out-of-pocket costs for medical services. The out-of-pocket maximum is the limit on the total amount a patient will have to pay for covered services in a plan year. After reaching this limit, the insurance company covers 100% of the costs. Understanding these terms is crucial for navigating health insurance policies effectively.