What does “cost-sharing” refer to in health insurance?

Cost-sharing refers specifically to the portion of healthcare costs that insured individuals must pay out of their own pockets when they receive medical services. This concept is a critical component of health insurance plans, as it outlines the responsibility of the policyholder in terms of co-payments, deductibles, and coinsurance.

When individuals seek medical care, their insurance typically covers a significant portion of the costs; however, cost-sharing represents the financial obligation that remains. For example, a deductible is the amount the insured must pay before the insurance kicks in, while co-payments and coinsurance are additional amounts paid for specific services. Understanding cost-sharing is vital for consumers as it directly affects their healthcare expenses and overall out-of-pocket costs.

The other choices represent different aspects of health insurance. The total premium paid for the insurance policy refers to the regular payments made to maintain the insurance coverage and does not reflect out-of-pocket expenses incurred when utilizing healthcare services. The difference between in-network and out-of-network costs pertains to the varying amounts charged by healthcare providers who are part of the insurance network versus those who are not, but it does not define cost-sharing itself. Lastly, costs associated with preventive care may often be covered entirely by health insurance policies, which again does not fall under