How a health plan works

How does a health plan work?

You pay for a health plan in layers: a monthly premium, then the full price of most care until you reach the deductible, then a copay or a percentage of each bill (coinsurance), up to the out-of-pocket max, the most you'd pay for covered, in-network care in a year.

How does a deductible work?

A deductible is the amount you pay for covered care each year before your plan starts sharing the cost. Until you reach it, you usually pay the full price of each bill.

Some care skips the deductible. Most plans cover in-network preventive care, like an annual checkup, at no cost to you. Some plans also charge a flat copay for visits from the first day. Your monthly premiums don't count toward the deductible.

How does an out-of-pocket max work?

The out-of-pocket maximum is the most you'll pay for covered, in-network care in one plan year. Your deductible, copays and coinsurance all count toward it. Once you reach it, the plan pays for covered in-network care in full for the rest of the year.

Your premiums don't count toward it, and neither does care the plan doesn't cover. Out-of-network care often has a separate, higher limit.

What's the difference between a copay and coinsurance?

A copay is a flat amount, like $30 for a doctor visit, whatever the bill comes to. Coinsurance is a percentage of the bill, like 20%, so what you pay grows with the price.

Many plans use both: copays for visits and prescriptions, and coinsurance for bigger bills like a hospital stay.

What does 20% coinsurance mean?

You pay 20% of each bill and the plan pays the other 80%, usually once you've met your deductible. On a $2,305 ER bill, 20% is $461. Coinsurance stops when you reach your out-of-pocket max.

Does a copay count toward my deductible?

It depends on the plan, and often it doesn't. Copays do count toward your out-of-pocket maximum.

Your plan's Summary of Benefits and Coverage shows this service by service. It says whether you pay a copay straight away, or the full price until you've met the deductible.

What does in-network mean?

In-network doctors, hospitals and pharmacies have a contract with your plan that sets their prices. Out-of-network providers don't, so you usually pay more. Some plans pay nothing for out-of-network care except emergencies.

Do premiums count toward the out-of-pocket max?

No. Premiums are what you pay to have the plan. They don't count toward your deductible or your out-of-pocket max.

What's the worst year I could have on my plan?

Add a year of premiums to your out-of-pocket maximum. That's the most you'd pay in one plan year for premiums plus covered, in-network care. The plan explainer adds this up for your own plan, free.

Out-of-network care and anything the plan doesn't cover are outside that limit, so they can add to it.

What is an HSA-eligible plan?

It's a high-deductible plan that meets federal rules, which lets you pay into a Health Savings Account (HSA). Money you put in lowers your taxable income. You can spend it on qualified medical costs without paying tax on it. These plans usually have lower premiums and higher deductibles.

How are these prices estimated?

Bill prices are estimated from 300,000+ billing records for privately insured people. We use the 75th percentile to be conservative: we price an ER visit at $2,305 and a hospital stay at $16,875. These are national, in-network figures, so your doctor's price may differ.

Where do I find my plan's Summary of Benefits and Coverage?

The Summary of Benefits and Coverage (SBC) is a short document in a standard format that every plan has to provide. It lists the deductible, out-of-pocket maximum, copays and coinsurance.

If your coverage is through work, look in your employer's benefits portal or open enrollment materials, or ask HR. You can also ask your insurer. They have to give it to you free of charge.

Is the plan explainer free, and what happens to my PDF?

Yes, it's free, and you don't need an account. We keep the PDF you upload and the plan details we read from it, so we can show your plan back to you. Our Privacy Policy explains how we handle it.