What is a flat deductible in health insurance?

A flat deductible in health insurance is defined as the amount of expenses that the insured must pay out of pocket before the insurance company begins to cover any benefits. This means that before any claims can be paid by the insurer, the insured has to cover this set amount of costs themselves.

For example, if a health insurance policy has a flat deductible of $1,000, the insured is responsible for paying the first $1,000 of their medical expenses. Once this threshold is met, the insurance will start to provide coverage according to the terms of the policy.

The other options refer to different concepts in health insurance. The maximum out-of-pocket expense is a limit on how much the insured will have to pay in total for covered services within a policy year. A percentage of costs covered by insurance indicates the co-insurance structure, where the insured pays a specific percentage of costs after the deductible. The annual premium amount is the cost of the insurance coverage itself and does not relate to the out-of-pocket expenses incurred when accessing care.