What does a deductible represent in health insurance?

A deductible in health insurance is the amount a policyholder is required to pay out of pocket for healthcare services before their insurance begins to cover costs. This is a crucial aspect of many health insurance plans, as it ensures that policyholders share in the costs of their healthcare. The deductible typically resets annually, meaning that each year, the policyholder must meet this amount before the insurance coverage kicks in for further services.

In this context, understanding the deductible is important because it affects how much a policyholder will need to budget for healthcare expenses. Once the deductible is met, the insurance company starts to pay its share of the costs for covered services, leading to reduced out-of-pocket expenses for the insured.

Indirectly, the other options highlight different aspects of health insurance but do not define a deductible. The total annual healthcare cost paid by the employer focuses on the employer's costs related to providing insurance, while the monthly premium pertains to the regular payment made for maintaining the insurance policy. The amount covered by the insurance after services relate to the plan’s benefits but do not reflect the initial out-of-pocket expense that defines the deductible.