Which term describes the amount an insured must pay out-of-pocket before coverage kicks in?

The term that describes the amount an insured must pay out-of-pocket before coverage begins is the deductible. A deductible is a predetermined amount established in an insurance policy that the policyholder must pay for covered services or treatments before the insurance company starts to cover the costs. This mechanism is used to control insurance costs and can encourage responsible use of healthcare services, as insured individuals might be more discerning about seeking treatment if they know that a portion of the cost lies with them.

Premium refers to the financial obligation an insured pays periodically to maintain an insurance policy, whereas coinsurance describes the shared costs of coverage after the deductible has been met, where the insured pays a percentage of the costs. The out-of-pocket maximum is the ceiling on the total amount an insured will pay in a policy period, including deductibles, coinsurance, and copayments, after which the insurer pays 100% of costs.