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Understanding Health Insurance Costs: Deductibles, Copays, Coinsurance, and Out-of-Pocket Maximums

Health insurance plans include several cost-sharing terms that describe how you and your insurance company split the cost of your medical care. This includes deductible, copay, coinsurance, and out-of-pocket maximum, which are covered in this article.

Zachary Ortiz avatar
Written by Zachary Ortiz
Updated today

You can check your plan’s summary of benefits for a comprehensive view of your plan deductible, copay, coinsurance, and out-of-pocket maximum by logging into your HealthSherpa account at https://www.healthsherpa.com/sessions/new. You can also call your insurance company directly using the carrier phone number listed in your HealthSherpa account, or by calling our Consumer Advocate team at 855-772-2663, Monday–Friday, 6am–4pm PT.

Deductible

Your deductible is the amount you pay out of pocket for covered health services before your insurance starts sharing costs.

  • Example: If your deductible is $2,000, you pay the first $2,000 in covered services yourself. After that, your plan helps pay for additional costs.

Tip: Some services, like preventive care or certain visits with a copay, may be covered before you meet your deductible (check your summary of benefits for more information).

Copay

A copay (or copayment) is a fixed dollar amount you pay when you receive a covered service.

  • Example: $20 for a primary care visit or $50 for an emergency room visit.

  • Copays are different from a deductible (a total you must meet before coverage begins) and from coinsurance (a percentage of the cost after the deductible).

  • Some plans use copays for routine visits or prescriptions but may require you to meet your deductible for other services.

Check your plan’s Summary of Benefits for details on which services have copays and how much they are.

Coinsurance

Coinsurance is the percentage of costs you pay for a covered service after you’ve met your deductible.

  • Example: If your coinsurance is 20%, you pay 20% of the cost and your insurance pays 80%.

  • Coinsurance rates can differ for in-network vs. out-of-network care, so review your plan’s summary for specifics.

Out-of-Pocket Maximum

Your out-of-pocket maximum is the most you’ll pay for covered services in a plan year.

Once you reach this amount through deductibles, copays, and coinsurance, your insurance pays 100% of covered in-network costs for the rest of the year.

  • Tip: Think of the deductible as the starting line—what you must pay before coverage kicks in—and the out-of-pocket maximum as the finish line—the most you’ll pay in that year.

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