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Health Insurance Basics FAQ

Health Insurance Basics in Plain English

Deductibles, copays, coinsurance, HMO versus PPO, and the metal tiers, explained simply so you can pick a plan with confidence. Free, unbiased help whenever you want it.

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Explanation of health insurance costs and terms
Quick Answer

How Does Health Insurance Work?

You pay a monthly premium to keep your plan. When you get care, you may owe a copay or pay toward your deductible. After you meet the deductible, you and the plan share costs through coinsurance until you hit your out of pocket maximum, after which the plan pays 100 percent for the rest of the year.

  • Premium: what you pay monthly to have coverage
  • Deductible: what you pay before the plan chips in
  • Out of pocket max: the most you pay in a year
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Common Questions

Health Insurance Terms and How Plans Work

The building blocks of any health plan, defined simply so the fine print stops being confusing.

What You Pay

What is a premium?

A premium is the fixed amount you pay every month to keep your health insurance active, whether or not you use care. It is separate from what you pay when you actually see a doctor.

What is a deductible?

A deductible is the amount you pay out of pocket for covered care before your plan starts paying its share. For example, with a 2,000 dollar deductible you pay the first 2,000 dollars of covered services yourself.

What is a copay?

A copay is a fixed fee you pay for a specific service, such as 30 dollars for a doctor visit or 15 dollars for a prescription. Many plans charge copays even before you meet your deductible.

What is coinsurance?

Coinsurance is your share of a cost after you meet your deductible, shown as a percentage. With 20 percent coinsurance, the plan pays 80 percent of a covered bill and you pay the remaining 20 percent.

What is an out of pocket maximum?

The out of pocket maximum is the most you will pay for covered care in a plan year. Once you reach it through deductibles, copays, and coinsurance, your plan pays 100 percent of covered services for the rest of the year.

Plan Types and Networks

What is the difference between an HMO and a PPO?

An HMO usually costs less but keeps you in a set network and often requires a referral to see a specialist. A PPO costs more but lets you see providers in or out of network and skip referrals. The best fit depends on your doctors and budget.

What is an EPO or a POS plan?

An EPO is like an HMO with no referrals needed but no out of network coverage except emergencies. A POS blends HMO and PPO features, using referrals but allowing some out of network care. We help you compare them.

What is a provider network?

A network is the group of doctors, hospitals, and pharmacies that contract with your plan for lower rates. Staying in network keeps your costs down. Out of network care usually costs more or is not covered.

Do I need a referral to see a specialist?

It depends on the plan. HMO and POS plans often require a referral from your primary doctor. PPO and EPO plans usually let you go straight to a specialist. We flag this when comparing plans for you.

Coverage, Tiers, and Savings

What are the metal tiers?

Marketplace plans come in Bronze, Silver, Gold, and Platinum tiers. Bronze has the lowest premium and highest out of pocket costs, while Platinum is the reverse. Silver is popular because it unlocks extra savings for many lower income households.

What does a health plan have to cover?

Every ACA compliant plan covers a set of essential health benefits, including preventive care, doctor visits, emergency care, hospitalization, prescriptions, maternity, and mental health, with no annual or lifetime dollar limits on those benefits.

What is preventive care and is it free?

Preventive care includes screenings, annual checkups, and many vaccines. On ACA compliant plans these are covered at no cost to you when you use an in network provider, even if you have not met your deductible.

What is a premium tax credit or subsidy?

A premium tax credit is financial help based on your income and household size that lowers your monthly premium. Many people qualify without realizing it. We check your eligibility for free before you enroll.

What is an HSA?

A health savings account is a tax advantaged account you can use with a qualifying high deductible plan. You put money in tax free and use it for medical costs. It is a smart way to save if you do not expect heavy medical use.

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