Benefits & Health

What you pay every month, no matter what

Your premium is a fixed monthly payment for being enrolled in the plan. It comes out of every paycheck, regardless of whether you see a doctor that month or not. It's like a subscription fee for access to insurance.

Example: If your plan has a $180/month premium, you pay $2,160/year just to have coverage. That's before you use a single dollar of benefits.

A lower premium sounds better, but plans with low premiums almost always have higher deductibles. You're not saving money, you're shifting when you pay. Calculate total annual cost, not just the monthly premium.

What you pay before insurance starts covering costs

Your deductible is the amount you pay out of pocket for covered services before your insurance plan starts sharing the cost. Once you hit your deductible, you usually pay only a coinsurance percentage (not the full bill).

Example: With a $1,500 deductible: if you have a $2,000 procedure, you pay the first $1,500, then your coinsurance kicks in for the remaining $500. If you never hit $1,500 in care, your insurance never pays for anything beyond preventive care.

High-deductible plans have lower premiums but you absorb more cost if you get sick. Low-deductible plans cost more monthly but share costs sooner. Think about last year's medical spending: if it was under $1,000, a high-deductible plan often wins on total cost.

A flat fee you pay for a specific type of visit

A copay is a fixed dollar amount you pay for a specific service (like a primary care visit, specialist visit, or prescription). It usually applies before or after your deductible depending on the plan, and doesn't count toward your deductible in most cases.

Example: A plan might have: $25 copay for primary care, $50 copay for specialist, $15 copay for generic prescriptions. These amounts are the same regardless of what the provider actually charges.

Copays make costs predictable for routine care. If you see doctors frequently, a plan with lower copays may save you money even if the premium is higher. Check the copay for the types of visits you actually use.

Your percentage share of costs after the deductible

Once you've met your deductible, you and your insurance company split costs by a percentage. An 80/20 plan means insurance pays 80% and you pay 20% of each covered service. This continues until you hit your out-of-pocket maximum.

Example: You've met your $1,500 deductible. You have an X-ray that costs $400. With 80/20 coinsurance, insurance pays $320 and you pay $80. If you had 70/30 coinsurance, you'd pay $120.

Coinsurance matters most if you have significant medical needs after your deductible. For most healthy people it rarely comes into play. But if you're planning a surgery or managing a chronic condition, 80/20 vs 70/30 can mean hundreds of dollars.

The most you'll ever pay in a year. Then insurance covers 100%.

Your out-of-pocket maximum is a cap on what you can be required to pay in a plan year. Once you've paid your deductible + coinsurance amounts up to this limit, insurance pays 100% of covered costs for the rest of the year.

Example: Your OOP max is $6,000. In a bad year, you have $20,000 in medical bills. You pay the first $6,000 (deductible + coinsurance combined). Insurance covers the remaining $14,000 at 100%.

The out-of-pocket max is your catastrophic protection: it's what prevents a medical crisis from becoming a financial crisis. When comparing plans, the OOP max tells you your worst-case annual cost. A plan with a $3,000 OOP max gives you more protection than one with a $7,000 OOP max.