In health insurance, what is the purpose of a deductible?

The purpose of a deductible in health insurance is to share costs between the insurer and the insured. A deductible is the amount that a policyholder must pay out-of-pocket for healthcare services before the insurance company begins to pay its share of the costs. This mechanism is designed to ensure that insured individuals have some financial responsibility for their healthcare expenses, which can help reduce the number of unnecessary claims made to the insurer. By having a deductible, insured individuals are encouraged to consider the costs of care and may opt for more affordable options or preventative measures, ultimately promoting more responsible use of healthcare resources. This sharing of costs helps maintain the sustainability of insurance programs by encouraging participants to be mindful of their healthcare expenditures.