Covered California Certified Enroller Practice Exam

What is a deductible?

1. The total amount for all covered services

2. The amount paid for non-covered services

3. The amount paid before insurance covers costs

4. A fixed fee for each visit to a healthcare provider

The correct answer is: The amount paid before insurance covers costs

A deductible is the amount you are required to pay for healthcare services before your health insurance begins to cover costs. This means that if you have a deductible of, for example, $1,000, you will need to pay that amount out of pocket for covered healthcare services before your insurance will contribute to any further expenses. This is a common feature in many health insurance plans, designed to ensure that policyholders share some of the costs associated with their healthcare, thus discouraging unnecessary medical care. Once you’ve met your deductible, your insurance will typically start to share the costs with you, often through a copayment or coinsurance arrangement, where you may still have to pay for a portion of the costs for services. The other options describe concepts that are not correct in relation to what a deductible is. Total amounts for covered services represent overall costs rather than an upfront payment requirement. Non-covered services refer to expenses not paid by insurance, and a fixed fee for each provider visit is typically known as a copayment, which operates differently from a deductible. Understanding that a deductible is essentially a threshold that must be crossed for benefits to kick in helps clarify its role in health insurance management.