Deductibles, Copays, and Out-of-Pocket Maximums

When comparing health plans, the monthly premium is usually the first number people notice. But what you pay when you actually use your coverage can matter just as much.

The deductible is the amount you generally pay for covered services before your health plan begins to share the cost. A copay is a set amount you pay for certain covered services, such as an office visit or prescription. Coinsurance is the percentage of the cost you generally pay after meeting your deductible.

The out-of-pocket maximum is the most you generally pay during a plan year for covered, in-network services, subject to the terms of the plan. Once you reach that limit, the plan generally pays 100% of covered, in-network benefits for the remainder of the plan year.

A plan with a lower premium may come with a higher deductible or other out-of-pocket costs, while a plan with a higher premium may have lower costs when you receive care. Some high-deductible health plans also allow you to contribute to a Health Savings Account (HSA), which can provide tax advantages when used according to applicable rules.

The right plan depends on your household’s needs, how often you expect to use health care, the providers and prescriptions you need, and how much you could comfortably pay if something unexpected happened.

Looking at the full picture—not just the monthly premium—can help you better understand the coverage and costs of a health plan.

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