How to Read Any Health Plan in 5 Minutes
The 5 terms that decide what you'll pay—and nothing else.
A health plan is a rulebook for splitting costs with your insurer. You only need to know 5 terms.
The 5 Numbers That Matter
- Premium — Your monthly cost to have the plan ($200/month = $2,400/year)
- Deductible — What you pay first before insurance kicks in (e.g., $2,000)
- Copay — Flat fee per visit ($30 for a doctor, $60 for a specialist)
- Coinsurance — Your percentage after deductible (you pay 20%, plan pays 80%)
- Out-of-Pocket Max — Your yearly spending cap. After this, insurance pays 100%
See It In Action
Your plan: $200/month premium, $2,000 deductible, 20% coinsurance, $6,000 out-of-pocket max.
You break your arm. Hospital bill: $10,000.
- First $2,000 (your deductible)
- 20% of the remaining $8,000 = $1,600 (coinsurance)
- Total: $3,600 (plus your monthly premiums)
If bills kept coming, you'd stop paying at $6,000 (your out-of-pocket max). After that, the plan covers everything.
Before You Choose a Plan
- Monthly premium
- Deductible
- Out-of-pocket max
- Copays for visits you expect
- Is your doctor in-network?
Don't pick by premium alone. A cheap premium with a high deductible can cost more if you actually use care.
What's Next
Ready to pick a plan? Continue to How to Choose a Health Plan in 10 Minutes.
Ready to find the right health plan for you?
This article is for educational purposes only and does not constitute tax, legal, or medical advice.
Frequently Asked Questions
What's the difference between deductible and out-of-pocket max?
If I hit my deductible, do I stop paying?
What's the difference between copay and coinsurance?
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