Health insurance costs can be confusing because a plan may include several different types of out-of-pocket expenses. Understanding deductibles, copays, and coinsurance makes it easier to compare plans.
A deductible is the amount a covered person may have to pay for eligible services before the insurance plan begins paying according to its normal cost-sharing rules. Some services may be covered before the deductible depending on the plan.
A copay is usually a fixed amount paid for a covered service, such as a doctor visit or prescription. The amount can vary by service and plan.
Coinsurance is generally a percentage of the allowed cost that the insured pays after applicable deductible requirements are met. The exact split depends on the plan.
The out-of-pocket maximum is another important figure. In plans that have one, it generally limits what the member pays for covered services during a plan period, although premiums and certain non-covered expenses may not count.
When comparing health plans, look beyond the monthly premium. Consider the deductible, copays, coinsurance, network, prescription coverage, exclusions, and out-of-pocket maximum.
Because health insurance regulations differ by country and plan type, consumers should review official plan documents before making a decision.