Health Insurance Cost-Sharing
Plain English
A deductible is what you pay before insurance starts sharing costs. Copays and coinsurance are what you keep paying after that, on each visit or bill. The out-of-pocket maximum is the most you'll pay in a year before insurance covers everything else.
What is it?
A deductible is the amount paid out of pocket before the plan starts sharing costs. A copay is a fixed dollar amount per service (e.g. $30 per doctor visit). Coinsurance is a percentage of a bill's cost you pay after the deductible (e.g. 20%). The out-of-pocket maximum is the most a person pays in covered costs in a plan year, after which the plan pays 100% of covered services.
Why does it matter?
These four numbers together — not just the monthly premium — determine what a health event actually costs a household. A lower-premium plan with a high deductible and no clear out-of-pocket maximum protection can cost far more in a bad year than a higher-premium plan with better cost-sharing.
How does it work?
Typically: pay 100% of costs until the deductible is met, then pay copays/coinsurance on covered services, until total out-of-pocket spending hits the out-of-pocket maximum for the year — after which the plan covers 100% of covered services for the rest of the year.
Risks and limitations
Not all services count toward the deductible or out-of-pocket maximum the same way (e.g. out-of-network care often doesn't count at all, or has a separate, higher maximum). Plan details vary significantly — always check the specific plan's summary of benefits.
Questions to ask a professional
What is this plan's deductible, copay/coinsurance structure, and out-of-pocket maximum? Does out-of-network care count toward the same out-of-pocket maximum, a separate one, or not at all?