What is the primary purpose of health insurance deductibles?

The primary purpose of health insurance deductibles is to share costs between the patient and the insurer. A deductible is the amount the insured must pay out-of-pocket for healthcare services before the insurance plan begins to pay. This arrangement is designed to encourage individuals to participate in their healthcare spending by requiring them to contribute financially, thereby fostering a sense of cost awareness and responsibility.

When a patient meets their deductible, the insurance starts covering a larger portion of the costs for subsequent medical services, which can help manage overall healthcare expenses. This cost-sharing model is crucial in managing healthcare utilization and incentivizes patients to make informed choices about their medical care.

Other options may touch on various aspects of health insurance, such as caps on out-of-pocket expenses, encouragement of service use, or premium reductions; however, these are secondary effects or outcomes of how deductibles function rather than the fundamental reason for their existence in health insurance plans.