What Is a Deductible? 

You may still have some costs after you meet your deductible.

Premium Payments

Premium payments are what you pay, usually monthly, to keep your health insurance active. You must pay your premium, whether or not you use any healthcare services. Premium amounts vary, depending on your plan, where you live, and your age. You will continue to pay your premium payments after you meet your plan’s deductible.

Copays

Many health insurance plans have copays. These are fixed payments you make each time you have a medical service done. For example, you might owe a $20 copay every time you have a doctor’s visit or get a prescription filled. Sometimes, copays go toward your deductible, but many times, they do not. Most often, you will have to pay copays for health services even after you reach your deductible. Copays usually count toward your out-of-pocket maximum.

Coinsurance

Coinsurance is the percentage of a medical bill that you pay after you reach your deductible. Many insurance plans offer an 80/20 coinsurance split. This means the insurance pays 80 percent of the bill, while you pay 20 percent.

Out-of-Pocket Maximum

Your out-of-pocket maximum is the most that you will pay for health services in a year. Once you reach this amount, your insurance company will pay 100 percent of your costs for the rest of the year. Your deductible counts toward your out-of-pocket maximum, so when you pay your deductible, you are closer to reaching your max. Premiums do not count toward your out-of-pocket maximum.

Here’s an example of how your deductible, coinsurance, and out-of-pocket maximum work:

• Let’s say your health insurance plan has a $1,000 deductible and a $4,000 out-of-pocket maximum. You have surgery, and the bill is $10,000. You will pay $1,000 to reach your deductible. Then, you will split the remaining $3,000 with your insurance company (a coinsurance split) until you’ve reached your out-of-pocket maximum. Once you hit your $4,000 max, your insurance company will cover the rest.