Health insurance terms explained
By Colson · Updated June 13, 2026
Five terms decide what you actually pay: the premium (monthly cost), the deductible (what you pay before coverage kicks in), copays and coinsurance (your share of each service), and the out-of-pocket maximum (the most you'll pay in a year). Understanding them helps you pick the right plan.
Skip ahead and run the numbers:
Estimate your ACA subsidy →Premium vs. deductible
Your premium is the fixed amount you pay every month to keep coverage, whether or not you use care. Your deductible is what you pay out of pocket for covered services before the plan starts paying. Plans with lower premiums usually have higher deductibles, and vice versa — so the cheapest monthly price isn't always the cheapest overall.
Copays, coinsurance and the out-of-pocket max
A copay is a flat fee for a service (e.g., $30 for a doctor visit). Coinsurance is a percentage you pay after meeting the deductible (e.g., 20% of a bill). The out-of-pocket maximum caps your total yearly spending on covered care — once you hit it, the plan pays 100% of covered services for the rest of the year.
Metal tiers and subsidies
ACA marketplace plans come in Bronze, Silver, Gold and Platinum tiers that trade premium for cost-sharing. Premium tax credits lower your monthly cost based on income, and Silver plans can add cost-sharing reductions at lower incomes. Estimate your subsidy before choosing a tier.
Frequently asked questions
What is the difference between a deductible and an out-of-pocket maximum?
The deductible is what you pay before the plan starts sharing costs; the out-of-pocket maximum is the total ceiling on your yearly spending for covered care, including deductible, copays and coinsurance. After the max, the plan pays 100%.
Is a lower premium always cheaper?
No. Low-premium plans usually carry higher deductibles and cost-sharing, so if you use a lot of care you may pay more overall. Match the plan to how much care you expect to use.
What is coinsurance?
Coinsurance is the percentage of a covered service's cost you pay after meeting your deductible — for example, 20%, with the plan paying the other 80% until you reach your out-of-pocket maximum.
Ready to run your own numbers?
Get a free, instant estimate — then compare a real quote.
Estimate your ACA subsidy →