Health Insurance Guide
Premium, Deductible, Copay & Coinsurance
Premium, deductible, copay, and coinsurance are the four terms that decide what you actually pay. Here is what each one means.
Key takeaways
- Premium is monthly; deductible is what you pay before cost-sharing kicks in.
- Copay is a flat fee; coinsurance is a percentage.
- Judge a plan on total likely cost, not just premium.
The four terms
These four decide your total cost, and confusing them leads to picking the wrong plan.
- Premium — what you pay monthly to have the plan, whether or not you use it
- Deductible — what you pay yourself before the plan starts sharing most costs
- Copay — a fixed dollar amount for a specific service (like $30 for a visit)
- Coinsurance — your percentage share of a cost after the deductible (like 20%)
How they work together
You pay the premium every month. When you get care, you pay toward the deductible until it is met, then you and the plan split costs via copays and coinsurance, until you hit the out-of-pocket maximum, after which the plan pays 100% for covered care.
Why it matters when choosing
A low premium with a high deductible can cost more overall if you use a lot of care. Look at all four numbers plus the out-of-pocket maximum, not just the premium. A licensed agent compares total likely cost for you, free.
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Sources
This guide is general education from a licensed insurance broker, not individual advice, and not affiliated with any government agency. Rules change; confirm current details with the sources above or a licensed agent.