Common Insurance Terms

Coinsurance: Your share of the costs of a health care service, usually figured as a percentage of the amount charged for services. You start paying coinsurance after you have paid your plan’s deductible. Your plan pays a certain percentage of the total bill and you pay the remaining percentage.

Copay: A fixed amount you pay for a specific medical service (typically an office visit) at the time you receive the service. The copay can vary depending on the type of service. Copays cannot be included as part of your annual deductible, but they do count toward your out-of-pocket maximum.

Deductible: The amount you pay for health care services before your health insurance begins to pay. For example, if your plan’s deductible is $1,000, you’ll pay 100% of eligible health care expenses up to the first $1,000 for the year. After that, you share the cost with your plan by paying coinsurance.

In-network: Care received from a doctor, group of doctors, clinics, hospitals, or other health care providers that have an agreement with your medical plan provider. You’ll pay less when you use in-network providers.

Out-of-network: Care received from a doctor, group of doctors, clinics, hospitals, or other health care providers that do not have an agreement with your medical plan provider. You’ll pay more when you use out-of-network providers.

Out-of-pocket maximum: This is the most you must pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance, your health plan pays 100% of the costs of covered benefits. However, you must pay for certain out-of-network charges above reasonable and customary amounts.

Reasonable and customary: The amount of money a health plan determines is the normal or acceptable range of charges for a specific health-related service or medical procedure. If your health care provider submits higher charges than what the health plan considers normal or acceptable, you may have to pay the difference.