Health insurance can feel confusing, especially with so many terms and rules. To make it easier, we’ve broken down the key parts of a health plan and what they mean for you.
Premium
Your premium is the amount you pay each month to keep your health insurance active. Think of it as a subscription fee, even if you don’t use your insurance, you still pay it to stay covered.
Deductible
The deductible is how much you pay out-of-pocket for certain services before your health plan starts sharing the cost. For example, if your deductible is $1,500, you’ll pay for covered medical expenses up to that amount before your plan begins to help.
Copays and Coinsurance
Once you’ve met your deductible, you may still share costs with your plan.
Copay: A set amount you pay for a service, like $20 for a doctor’s visit.
Coinsurance: A percentage of the bill you’re responsible for, such as 20%.
Out-of-Pocket Maximum
This is the most you’ll pay in a year for covered services. After you reach your out-of-pocket maximum, your health plan pays 100% of covered in-network costs for the rest of the year.
Watch Out For
There are a few areas where people often run into surprises:
In-network vs. out-of-network: In-network doctors and hospitals usually cost less. Out-of-network care may be more expensive or not covered at all.
Prior authorizations: Some services need your insurance company’s approval before you get them.
Surprise bills: Even at in-network hospitals, you may see charges from out-of-network providers, like anesthesiologists or labs.
Understanding these basics can help you make the most of your health coverage, avoid surprises, and better plan for your medical costs.
