what does 'it' refer to?

I'm not making anywhere near as much money as I did when I was employed full time, but now we don't need as much either. I generate enough income to handle our $600-a-month mortgage payments plus the usual expenses for a family like ours. That includes everything from music lessons and dental bills to car repairs and college costs. When it comes to insurance, we have a poor man's major-medical policy. We have to pay the first $500 of any medical fees for each member of the family. It picks up 80% of the costs beyond that.

Could you tell me what 'it' refers to, please?