Understanding Health Insurance Deductibles and Copays

Understanding how deductibles, copays, and coinsurance work is essential for managing your healthcare costs effectively. Let's break down these key terms.

Deductibles

Your deductible is the amount you pay out-of-pocket before your insurance starts covering costs. For example, with a $1,000 deductible, you pay the first $1,000 of covered medical expenses.

Copays

A copay is a fixed amount you pay for specific services, like $25 for a doctor visit or $10 for a prescription. Copays usually don't count toward your deductible.

Coinsurance

After meeting your deductible, coinsurance is the percentage of costs you share with your insurance company. For example, with 20% coinsurance, you pay 20% and insurance pays 80%.

Out-of-Pocket Maximum

This is the most you'll pay in a year for covered services. Once you reach this limit, your insurance pays 100% of covered costs.