According to a recent survey, 96% of Americans said that they knew the meaning of 4 common health insurance terms—deductible, coinsurance, copay, and total maximum out-of-pocket—but only 4% got all of them right!

Most people think they understand. But they don’t.

Could you fall in the 96%?

If you do, then you may be spending more than you have to. And you’re probably not getting the best value from your plan.

Health plans vary. But most follow a simple 3-phase formula that affects the cost of care.

Take the first step in knowing how to navigate your plan. Learn how it all works.

Phase 1

Before you meet your deductible…

You pay for most of your care

Each plan year starts with a new Deductible. You pay out-of-pocket for your medical care until your expenses total the amount of your deductible. Then, your plan begins to pay for covered care.

Copays (fixed dollar amounts you pay for certain covered services) are usually not included in the amounts needed to meet your deductible. Think of them as an added fee.

If you have family coverage, you may also need to meet your family deductible. Check your benefit information to see how that works.

Some in-network care, like preventive care, may be covered from day 1—before the deductible is met.

In-network example
Let’s say your plan has a $1,000 deductible and you pay $800 for covered medical services. You must spend $200 more in medical fees to meet your deductible. You also have to pay any copays. They usually don’t count toward meeting your deductible.

Phase 2

After you meet your deductible…

You only pay for part of your care

After you meet your deductible, your benefit plan may require you to pay a percentage (coinsurance) of some medical costs. And/or a flat fee (copay) for other costs. Some care may require you to pay coinsurance and a copay. Your plan takes care of the rest when you get covered, in-network services.

In-network example
Let’s say you see the doctor after you’ve met your deductible. And your plan has a $20 office visit copay and 20% coinsurance. That means you pay a fixed $20 fee (your copay) for your appointment, usually at the doctor’s office. If your doctor performs a special service, such as a blood test, you may also pay 20% of that cost (your coinsurance).

Phase 3

If you reach your maximum limit…

Your plan pays 100% of your covered, in-network care

The maximum limit is the most you could pay for covered, in-network care in a plan year. After that, your plan pays 100%. Your deductible, coinsurance, and copays all go toward meeting it. But you still need to pay your monthly premium.

In-network example
Let’s say your plan has a $6,000 max. If your family spends $6,000 on covered medical care during a plan year, your plan will pay for 100% of your covered in-network services for the rest of the year. All you need to pay is your monthly premium.