A deductible for health insurance is the amount of money an insured person must pay out-of-pocket for the covered year in order for their insurance provider to begin covering a percentage of medical expenses. For instance, if you have a $2,000 annual deductible, then you must pay $2,000 out-of-pocket for medical expenses covered by your health insurance plan before your insurance provider begins to cover any portion of the cost of your medical expenses.