Have questions about how health insurance works? You've come to the right place. We've covered the basics of health insurance for you below. We explain the differences between deductibles, coinsurance and copays, in-network and out-of-network benefits, HMO and PPO plans.

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Deductible: A deductible is the amount of money you must pay out of pocket before your health insurance coverage starts paying for medical services. For example, if you have a $1,000 deductible, you need to pay the first $1,000 of covered medical expenses before your insurance begins covering its share.


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Coinsurance: Coinsurance refers to the percentage of costs you share with your insurance provider after meeting your deductible. Once you've paid your deductible, your insurance plan will typically cover a percentage (e.g., 80%) of the allowed amount for covered services, and you'll be responsible for paying the remaining percentage (e.g., 20%).


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Copay: A copay is a fixed amount you pay for specific medical services or prescriptions at the time of receiving care. Unlike coinsurance, a copay doesn't depend on the total cost of the service. For example, you might have a $30 copay for a doctor's office visit or a $10 copay for generic prescriptions.


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In-network and out-of-network benefits: Health insurance plans often have a network of preferred providers, including doctors, hospitals, and other healthcare professionals. In-network refers to those providers who have contracted with your insurance plan to provide services at discounted rates. If you visit an in-network provider, your insurance plan will typically offer higher coverage levels and lower out-of-pocket costs. Out-of-network providers are not contracted with your insurance plan, and visiting them may result in higher costs for you, with less coverage from your insurance plan.


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HMO (Health Maintenance Organization) plans: HMO plans typically require you to select a primary care physician (PCP) from their network, and you must get referrals from your PCP to see specialists. HMO plans generally have lower premiums and out-of-pocket costs but offer less flexibility in choosing healthcare providers. Out-of-network benefits are typically limited or not covered except in emergencies.


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PPO (Preferred Provider Organization) plans: PPO plans offer more flexibility in choosing healthcare providers. You can see specialists directly without a referral, and you have the option to visit both in-network and out-of-network providers. In-network care will usually have lower out-of-pocket costs, while out-of-network care will have higher costs. PPO plans tend to have higher premiums compared to HMO plans.



It's important to note that the specifics of deductibles, coinsurance, copays, in-network, and out-of-network benefits can vary depending on your insurance plan, so it's crucial to review the details of your specific policy to understand how it works and what costs you can expect.