Explain the concept of 'deductible'.

The concept of a deductible refers to the specific amount that a policyholder must pay out-of-pocket for healthcare services before their insurance plan begins to cover the costs. This amount is typically set annually and varies from one insurance policy to another. Once the policyholder has fulfilled this requirement by paying the deductible, the insurance company will start to share the costs for covered medical expenses according to the terms of the policy, often through co-pays or co-insurance.

Understanding how a deductible functions is crucial for anyone managing health insurance, as it directly impacts financial planning for medical care. The deductible serves as a basic threshold that helps to prevent overuse of medical services, ensuring that policyholders are responsible for a portion of their medical costs before the insurer takes over.