Health plans can be confusing. But they make a lot more sense when you know a few basic terms.
A deductible is the amount you pay each year for covered healthcare services before your health plan starts to pay. For example, if your plan has a $2,000 deductible: You pay the first $2,000 of covered services. After you meet the deductible, you and the plan each pay part of the cost of healthcare services. Your part of the cost is called either coinsurance or copayment.
A coinsurance is the percentage of covered expenses you pay after you have paid your deductible. For example, if your health plan has a 20% coinsurance and the cost for an office visit is $100: You pay $20 and your health plan covers the rest.
A copayment is a fixed amount you pay for each healthcare service. Copays can vary for different services, and they do not count toward meeting your deductible.
The out-of-pocket maximum is the most you would have to pay for covered services in a plan year. Your out-of-pocket maximum includes the amounts you spend on deductibles, coinsurance, and copayments. When you reach your out-of-pocket maximum, the plan pays 100% for the rest of the plan year.
You will generally pay less when you receive healthcare services from an in-network provider.