Deductible, franchise, excess: one concept, five names.

In short: A deductible, an excess and a franchise are one mechanism under three names — the first slice of covered costs you pay before the insurer pays. Co-insurance is the percentage you keep paying after that slice is met; a co-payment is a flat fee per visit. The number that decides a bad year is the out-of-pocket maximum, the annual ceiling on your own share.

Move between insurance systems and the vocabulary resets every time. The Swiss adviser says franchise, the British policy says excess, the American plan says deductible, the French system quietly runs a franchise médicale that is something else again, and Spain rejects your visa application over copagos. Five names, and underneath them one concept wearing different national uniforms: the first slice of your costs is yours. Learn the concept once and every policy in every market becomes readable.

What is a deductible, and what else is it called?

Every insurer rations small claims the same three ways, alone or stacked. Here is the whole vocabulary, defined once.

The first-slice mechanism. A deductible is the amount of covered costs you pay yourself before the insurer starts paying. An excess is the same thing in British and Commonwealth wordings. A franchise is the same thing in Swiss and French usage. A self-insured retention is the same idea in commercial and liability policies, where the insured also typically handles the claim below the line rather than merely paying it — a term you meet on corporate cover, not on a family health plan. Whatever it is called, the two questions are always identical: how much, and does it reset per year or apply again per claim?

The sharing mechanism. Co-insurance is the fixed percentage of every bill you keep paying after the first slice is met — 10, 20, 30 per cent. Switzerland calls its version a retention; Japan simply calls it the patient share. Unlike a deductible, it does not stop when a threshold is crossed. It runs on every franc of every bill until something caps it.

The flat-fee mechanism. A co-payment — co-pay, copago — is a fixed charge per visit, per night or per prescription, independent of the bill’s size. Ten francs is ten francs whether the consultation cost eighty or eight hundred.

And the mechanism that governs all three. The out-of-pocket maximum is the annual ceiling on your total share — the point past which the insurer pays everything. A policy’s real generosity lives in how the first three stack and, above all, where they stop. The cap is the number that decides a catastrophe, and it is the number brochures print smallest.

What do the national versions look like?

Switzerland — franchise, the deliberate choice. You select your first slice, 300 to 2,500 francs a year, and buy your premium down by raising it. After the franchise: a 10% retention, capped at 700 francs a year, plus a separate CHF 15 daily contribution during hospital stays (all verified against the BAG). The Swiss version is the concept at its most honest — chosen annually, capped clearly, priced transparently. We wrote the arrival-year arithmetic separately.

Japan — the share, capped. No first slice at all: a straight 30% co-insurance on everything (20% for small children and most 70–74s), verified against the official guides. What rescues it is the ceiling — the High-Cost Medical Expense system caps any month’s bill at an income-based amount and refunds the excess. Sharing without a cap would be brutal; Japan’s cap is the system’s real generosity.

The US and international market — deductible, plus everything. American and international policies stack all three mechanisms: deductible, then co-insurance, then co-payments, bounded (in decent policies) by an out-of-pocket maximum. The reading order for any such policy: out-of-pocket maximum first, deductible second, everything else third.

Britain and its diaspora products — excess. Same first-slice concept, with one wording trap: some policies apply the excess per claim, not per year. Three claims, three excesses — a per-claim excess is worth roughly a third of a per-year one, and only the policy wording tells you which you hold.

The Gulf — cost-sharing written into the legal minimum. Dubai’s Essential Benefits Plan, the floor employers must meet for lower-paid staff, carries an AED 150,000 annual limit, 20 per cent outpatient co-insurance and an AED 1,500 annual medicines cap (DHA-verified). It is a useful reminder that a mandated policy is a floor, not a recommendation: compliance and adequacy are different tests.

Spain — sin copagos, the absence as a requirement. Spain’s visa system inverts the whole subject: the consulate demands a policy with no cost-sharing at all — no copays, no excess, at any size. The two words reject excellent international policies wholesale, which is why they got their own article.

France — a caution on the word franchise. The French franchise médicale is a set of small per-item charges inside the public system — not a chosen deductible in the Swiss sense. Same word, different machine: the reliable French cost-sharing story is that the public system reimburses shares of tariffs and a mutuelle absorbs the remainder.

What does a high franchise actually cost?

Switzerland is the clearest place to do the arithmetic, because every input is published. The figures below are the BAG’s; the sums are ours.

Two adults, identical cover, different franchises: one at the standard CHF 300, one at the maximum CHF 2,500. In a year with no care at all, the second wins by the whole premium difference — that is the entire case for a high franchise, and it is a good one.

Now give both of them a year with CHF 5,000 of covered costs. The CHF 300 franchise holder pays the first 300, then 10 per cent of the remaining 4,700 — 470 francs, comfortably inside the 700 cap — for 770 in total. The CHF 2,500 holder pays 2,500, then 10 per cent of the remaining 2,500, or 250, for 2,750 in total. A difference of 1,980 francs in a year that was unremarkable.

The ceiling is the reassuring part: because the retention is capped at 700, the worst either can pay is 1,000 francs against 3,200 — so the high franchise is a bounded bet, never an open one. The decision is simply whether the guaranteed annual premium saving exceeds the contingent 2,200-franc gap often enough across the years you will hold the policy. That is arithmetic on your likely year, and it is answerable.

When does the choice not matter?

Three cases deserve thirty seconds, not an afternoon. When your employer pays the premium and the cost-sharing is fixed by the scheme, the choice is not yours; read it to know your exposure, not to optimise it. When the premium difference between two levels is small relative to the exposure it buys, the arithmetic has already answered — take the lower slice and stop thinking about it. And when the plan has a low, clearly stated out-of-pocket maximum, the deductible matters far less than it appears to, because the cap has already defined your worst year. Cost-sharing only becomes frightening where nothing bounds it.

What changes at renewal, on a move, and at an older age?

At renewal the level is usually adjustable — the Swiss franchise is chosen annually, and most international policies allow a deductible change at anniversary. It is the one lever you can pull without new underwriting, which makes it the right place to absorb a premium increase.

On a move, only the vocabulary changes; the concept does not. Recheck two things in the new market’s wording: whether the first slice is per year or per claim, and whether anything sits outside the cap.

At an older age, the high-deductible bet slowly inverts. It is priced against a year with little care, and years with little care become less common. The level that was obviously right at thirty-two is worth re-deciding at fifty-five — not because the product changed, but because the likely year did.

How do I read any policy, anywhere?

Four questions. Is the first slice per year or per claim? What do I pay after it — a share, a flat fee, both? Where does my total stop — the out-of-pocket maximum, and does anything (hospital daily charges, above-tariff billing) sit outside it? And is any of this disqualifying where a visa is involved — Spain being the standing example that cost-sharing can fail an immigration test regardless of quality?

Four answers, found in any policy’s schedule in ten minutes, and the vocabulary — deductible, excess, franchise, retention, copago — stops mattering entirely. Which was the point of learning it once. The country-specific versions live on our destination pages, each verified against the primary sources named on the page.