What is meant by "cost-sharing" in a healthcare insurance policy?

"Cost-sharing" in a healthcare insurance policy refers to the mechanism by which the policyholder is responsible for paying a portion of the costs associated with their medical care. This includes out-of-pocket expenses such as deductibles, copayments, and coinsurance. The insurance company covers the remaining costs after these amounts are paid by the policyholder. This shared financial responsibility helps to control overall healthcare costs and encourages insured individuals to be more mindful of their healthcare spending.

In contrast, when an insurer pays 100% of all services, the policyholder would not have any cost-sharing responsibilities, which does not align with the typical structure of most healthcare plans. The total premium paid annually refers to the cost of maintaining the insurance policy itself and is separate from cost-sharing aspects. Finally, while the maximum out-of-pocket limit is an important component of a healthcare policy, indicating the cap on what a policyholder has to spend in a year, it does not directly express the idea of sharing costs as it applies specifically to the limits on expenses rather than the principle of dividing those expenses during the healthcare utilization.