Understand your bills · Lesson 2 of 16
What do deductible, copay, coinsurance, and out-of-pocket maximum mean?
The short answer
Your premium is what you pay to have the plan. For care, you often pay the deductible first. Then you may pay a copay (a set amount) or coinsurance (a percentage). The out-of-pocket maximum is the most you pay for covered, in-network care in a year.
Key takeaways
- Premiums keep your coverage active. They usually do not count toward your deductible.
- Some services, such as many preventive visits, may be covered before you meet your deductible.
- After you reach the out-of-pocket maximum, the plan pays 100% of covered in-network care for the rest of the plan year.
These words describe how you and your plan share costs.
Premium
The Premium is the regular payment to have insurance, often taken from each paycheck or paid monthly. You pay it even if you get no care.
Deductible
The Deductible is the amount you pay for covered care before your plan starts to share costs for most services. If your deductible is $1,500, you pay the first $1,500 of covered costs, using the plan's allowed amount.
Copay
A Copay (copayment) is a set amount, such as $30 for a doctor visit. Some plans charge copays before the deductible is met. Others do not. Your plan summary says which.
Coinsurance
Coinsurance is your percentage of the cost after the deductible. With 20% coinsurance, you pay $20 of each $100 allowed. The plan pays $80.
Out-of-pocket maximum
The out-of-pocket maximum is a yearly cap. Deductibles, copays, and coinsurance for covered in-network care count toward it. Premiums do not. Care that is not covered usually does not count either.
Federal rules set upper limits. For example, an HSA-qualified high-deductible plan in 2026 can have an out-of-pocket maximum no higher than $8,500 for self-only coverage.[1] Your own plan's limit may be lower.
What can be different for you
Family plans may have both a per-person and a family deductible. Some plans have separate deductibles for prescriptions. Medicare, Medicaid, and employer plans use different cost rules. Out-of-network care may have a separate deductible, a higher cost share, or no coverage. Your Summary of Benefits and Coverage lists your plan's numbers.
More detail (optional)
Plan year versus calendar year
Some plans reset on January 1. Others reset on a different date, such as July 1. Ask your plan or employer when your deductible resets.
Embedded and non-embedded deductibles
In some family plans, each person has their own smaller deductible inside the family deductible. In others, the whole family deductible must be met first. Your plan documents explain which applies.
Words in this lesson
- Premium
- The amount you pay, often monthly or per paycheck, to keep your health coverage.
- Deductible
- The amount you pay for covered care each plan year before your plan starts to share most costs.
- Copay (copayment)
- A set dollar amount you pay for a covered service, such as $30 for a doctor visit.
- Coinsurance
- Your share of a covered cost as a percentage, such as 20%, usually after you meet your deductible.
- Out-of-pocket maximum
- The most you pay in a plan year for covered in-network care. After that, the plan pays 100% of covered in-network costs. Premiums do not count.
- Allowed amount
- The price your plan agrees to pay for a covered service. Your share is based on this amount, not the provider's full charge.
Related
Where can I go for help?
Free help is often close by: the member services number on your insurance card, the billing office for your provider, your state insurance department, and nonprofit patient advocates.
Who can help, and what each one does
Prefer personal support? An independent patient advocate may help. Learn about Navigator & request beta access (Navigator is in development.)
This is general education. For decisions about your own plan, taxes, or legal rights, check your plan documents or a qualified professional.