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What is the difference between a deductible, a copay and coinsurance?

The short answer

A deductible is the amount you pay for covered care before your plan starts to share costs. A copay is a flat fee for a service, such as a doctor visit. Coinsurance is a percentage of the cost you pay after the deductible. Your out-of-pocket maximum caps what you pay in a year for covered care.

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What does each term mean?

TermWhat it means
PremiumThe monthly amount you pay to keep the plan, whether or not you use care.
DeductibleWhat you pay for covered care first. Some services, like preventive care, are covered before you meet it.
CopayA fixed amount, such as $30 for a visit.
CoinsuranceYour percentage of a covered cost, such as 20%, after you meet the deductible.
Out-of-pocket maximumThe most you pay in a year for covered in-network care. After that the plan pays the rest.

How do they work together?

Imagine a plan with a $2,000 deductible, 20% coinsurance and a $7,000 out-of-pocket maximum. You have a $10,000 hospital bill. You pay the first $2,000. On the remaining $8,000 you pay 20%, which is $1,600. Your total is $3,600, well below the maximum. The plan pays the other $6,400. Real plans differ, so always check the plan's summary of benefits.

How should I use this to compare plans?

Lower premiums usually come with higher deductibles. If you expect little care, a high deductible plan can cost less over the year. If you expect regular visits, drugs or a procedure, a plan with a higher premium and lower deductible can be cheaper. Also check the network, because out-of-network care can cost much more. An agent can help you estimate costs with your own doctors and prescriptions.

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Common questions

Does the premium count toward my deductible?

No. Premiums do not count toward your deductible or your out-of-pocket maximum.

Is preventive care subject to the deductible?

Most marketplace plans cover recommended preventive services at no cost to you, even before you meet the deductible, when you use an in-network provider.

What happens when I reach the out-of-pocket maximum?

For the rest of the plan year, the plan pays 100% of covered in-network care.

Sources

Rules change. Confirm dates and eligibility with your marketplace, your state Medicaid agency or Medicare before you enroll.

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