Health insurance terms can feel confusing, but knowing a few key concepts helps you choose a plan that fits both your health needs and your budget.
The Four Numbers That Matter
- Premium: what you pay monthly to keep your plan active.
- Deductible: what you pay for covered care before the plan starts sharing costs.
- Copay and coinsurance: your share of costs after the deductible, as a flat fee or a percentage.
- Out-of-pocket maximum: the most you pay in a year for covered in-network care.
Common Plan Types
HMO plans usually require you to stay in-network and get referrals. PPO plans offer more flexibility at higher cost. EPO and HDHP plans sit in between or trade lower premiums for higher deductibles.
What Is an HSA?
A Health Savings Account lets eligible high-deductible plan holders save pre-tax money for medical expenses. Unused funds roll over from year to year.
How to Choose the Right Plan
- Check that your doctors and prescriptions are covered.
- Estimate your yearly usage, not just the premium.
- Compare total cost: premiums plus likely out-of-pocket spending.
- Look for employer contributions or subsidies you may qualify for.
Open Enrollment
Most people can only change plans during open enrollment or after a qualifying life event such as marriage, birth, or loss of coverage. Mark the dates on your calendar.
Tips to Save Money
Use in-network providers, choose generics when appropriate, use preventive care that is covered at no cost, and review bills for errors.
Plan rules and prices differ by location and insurer. This article is educational and not medical or financial advice.