Understanding Your Costs
Premiums, deductibles, copays, coinsurance — here's what you actually pay when you use healthcare and how it all works together.
Premium
Pay monthly
Deductible
Pay first $X
Copay/Coinsurance
Share costs
OOP Max
Insurance pays 100%
Key Terms Explained
The amount you pay every month for your health insurance, whether you use it or not.
Example: If your premium is $400/month, you pay $4,800/year just to have coverage.
💡 Tip: Subsidies can significantly reduce your premium. A $400 plan might only cost $100 after tax credits.
The amount you pay out-of-pocket before your insurance starts paying for covered services.
Example: With a $2,000 deductible, you pay the first $2,000 of your medical bills. After that, insurance kicks in.
💡 Tip: Preventive care (annual checkups, vaccines) is usually free even before you meet your deductible.
A fixed amount you pay for a covered service at the time of the visit.
Example: $30 copay for a doctor visit means you pay $30 at the office, regardless of the total bill.
💡 Tip: Copays are predictable and often apply even before meeting your deductible for some plans.
Your share of costs after you've met your deductible, expressed as a percentage.
Example: With 20% coinsurance, if a procedure costs $1,000, you pay $200 and insurance pays $800.
💡 Tip: Coinsurance continues until you hit your out-of-pocket maximum.
The most you'll pay for covered services in a year. After this, insurance pays 100%.
Example: With an $8,000 OOP max, once you've paid $8,000 in deductibles, copays, and coinsurance, everything else is free.
💡 Tip: This is your financial safety net. In 2024, the ACA limit is $9,450 for individuals.
Real-World Example
Annual Premiums
$350 × 12 months
$4,200
Scenario A: Healthy Year (2 doctor visits)
Scenario B: Moderate Use (ER visit + surgery)
Scenario C: Major Health Event ($100,000 in bills)
The OOP max protected you from $92,000 in medical bills!
- ✅Lower premium = higher costs when sick. Bronze plans save money monthly but cost more if you need care.
- ✅The OOP max is your safety net. No matter how sick you get, you won't pay more than this in a year.
- ✅Preventive care is free. Annual checkups, vaccines, and screenings are covered 100% before deductible.
- ✅Estimate your total costs. Don't just look at premiums — consider potential medical expenses too.