What is the primary purpose of a calendar year deductible?

The primary purpose of a calendar year deductible is that it must be paid only once per year. This means that an insured individual is responsible for paying a specified amount of out-of-pocket expenses within the calendar year before their health insurance begins to cover additional costs.

Once the deductible is met, the insurance policy typically covers a larger portion of the expenses for the remainder of that calendar year. This structure encourages individuals to seek necessary medical care, as they have a set limit on their financial responsibility before insurance benefits apply. This feature also helps insurers manage risk and predict potential healthcare expenditures for policyholders on an annual basis.

Other options do not accurately reflect the nature of a calendar year deductible. For instance, the notion of it being paid for each treatment suggests a per-incident deductible rather than an annual deductible. The idea of being lost if not used may refer to certain benefits or limits under different plans, but a calendar year deductible is typically reset each year, rather than lost, while not covering expenses indefinitely is an inherent aspect of how insurance policies function.