Choosing a Marketplace plan can be confusing. Here are definitions of some basic terms to help you. For more help, visit the official Marketplace Glossary of Terms.
A premium is a set amount paid every month. It is the cost of coverage for the health insurance plan. Health plans usually provide coverage for a year, so you will make 12 premium payments in a given year, once each month. It is not included in your deductible, your copay or your co-insurance. You must pay this premium even if you do not receive any medical care that month. If you don’t pay your premium, you could lose your coverage.
The deductible is the amount you must pay annually for health care services during the coverage year, before your health insurance plan begins to pay for those services. This amount resets every year. Premium payments do not count towards meeting your deductible.
3. Out-of-Pocket Maximum
Out-of-pocket maximum is the most you pay during a policy period (usually one year) before your health insurance starts to pay 100% for covered services. Premium payments do not count towards the out-of-pocket maximum amount.
Copays are set amounts that you may be required to pay as your share of the cost for a medical service or supply, like a doctor’s visit, hospital outpatient visit or prescription drug. Copays are typically higher for specialist doctors than for family doctors and higher still for emergency room visits than visits to a clinic or an urgent care center. Copays count toward your deductible and your out-of-pocket maximum.
Co-insurance is your share of the costs of a covered health care service, calculated as a percent (for example, 20%) of the total cost of the service. Co-insurance is applied after you’ve met your deductible. Co-insurance payments count toward your out-of-pocket maximum.
See A Real-Life Example to learn how these costs might interact and the financial implications of the plan you choose.