What is the primary purpose of a deductible in health insurance?

What is the primary purpose of a deductible in health insurance?

• A. to reduce administrative costs
• B. to cover emergency care only
• C. to eliminate coverage for high-cost services
• D. to discourage overuse of medical services

Answer: (D)

A deductible is a fixed out-of-pocket amount you must pay before the health plan begins to pay for covered services. Its main purpose is to create a financial stake that discourages unnecessary or overuse of medical care, helping to control costs and influence utilization. After meeting the deductible, the plan shares costs through coinsurance or copays until the out-of-pocket maximum is reached. This is why the best choice describes discouraging overuse. The other options aren’t accurate: deductibles aren’t primarily about reducing administrative costs, aren’t limited to emergency care, and don’t eliminate coverage for high-cost services.

A deductible is a fixed out-of-pocket amount you must pay before the health plan begins to pay for covered services. Its main purpose is to create a financial stake that discourages unnecessary or overuse of medical care, helping to control costs and influence utilization. After meeting the deductible, the plan shares costs through coinsurance or copays until the out-of-pocket maximum is reached. This is why the best choice describes discouraging overuse. The other options aren’t accurate: deductibles aren’t primarily about reducing administrative costs, aren’t limited to emergency care, and don’t eliminate coverage for high-cost services.