Jennifer's health policy includes a deductible; what does this mean?

• A. A specified amount must be paid out of pocket before benefits
• B. Premium is fixed
• C. Copayment is required at each service
• D. Coinsurance applies

Answer: (A)

Understanding a deductible is about the initial amount you must pay out of pocket before your health insurance starts paying benefits. In Jennifer’s policy, you would need to cover that specified amount first, up to the deductible limit, before the insurer shares costs. Once the deductible is met, other cost-sharing features like coinsurance and copayments may apply, and the plan will begin paying according to its terms. The other terms describe different payment structures: the premium is the regular amount you pay to keep the policy active, a copayment is a fixed amount you pay for a specific service, and coinsurance is your share of costs after the deductible is met.