Health insurance 101
A few key terms decide what a plan really costs you. Here they are in plain language.
A few key terms decide what a plan really costs you.
What do the key terms mean?
Your premium is what you pay each month for coverage. The deductible is what you pay for care before the plan starts sharing costs. After that, you pay copays (flat fees) or coinsurance (a percentage) until you reach the out-of-pocket maximum, after which the plan pays 100% of covered in-network care for the rest of the year. Staying in network keeps costs lowest.
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Premium
What you pay every month to have coverage, whether or not you use it.
Deductible
What you pay for covered care before the plan starts to pay its share.
Copay
A flat fee for a service, such as $30 for a doctor visit.
Coinsurance
Your percentage of the cost after the deductible, such as 20%.
Out-of-pocket maximum
The most you'll pay in a year for covered in-network care.
Network
The doctors and hospitals your plan contracts with at lower prices.
Frequently asked questions
Is a lower premium always cheaper?
Not necessarily. A low-premium plan often has a higher deductible, so if you expect to use a lot of care, a higher-premium plan can cost less overall.
Where can I look up more terms?
Our benefits glossary explains more than 30 common terms in plain language.
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