Health insurance can be complex, with various cost-sharing mechanisms. Deductibles, copayments, and coinsurance are three terms you’ll encounter when navigating your healthcare expenses. Here’s a breakdown of each:

1. Deductibles: As mentioned earlier, a deductible is the amount you must pay out of pocket before your insurance starts covering expenses. Once you meet your deductible, you’ll typically pay only copayments or coinsurance for covered services.
2. Copayments: A copayment (or copay) is a fixed amount you pay for a covered healthcare service. For example, you might pay a $20 copay for a doctor’s office visit. Copayments are often used for routine services like office visits, prescriptions, or preventive care.
3. Coinsurance: Instead of a fixed copayment, coinsurance is a percentage of the cost of a covered service that you’re responsible for. For instance, if you have a 20% coinsurance requirement for a medical procedure that costs $1,000, you’ll pay $200, and your insurance will cover the remaining $800.

Each of these cost-sharing mechanisms affects your overall healthcare expenses. Plans with lower deductibles and copayments tend to have higher monthly premiums, while those with higher deductibles and coinsurance often have lower premiums. It’s essential to consider your healthcare needs and budget when choosing a plan.