10/23/2026
Health Insurance Terms... Do You Know What They Mean?
When shopping for health insurance, you will hear a lot of different terms thrown around. But do you actually know what they mean and how they affect what you pay?
Let's break down some of the most common terms you should understand when selecting your health insurance plan!
Deductible: The amount you pay for covered medical services before your insurance company starts paying for services subject to the deductible. For example, if you have a $3,000 deductible, you generally pay the first $3,000 of those expenses. Some services may be covered before you meet your deductible.
Out-of-Pocket Maximum: The most you will pay for covered, in-network medical expenses during your plan year. Once you reach this amount, your insurance company pays 100% of covered, in-network services for the remainder of the plan year. Your monthly premiums and certain other expenses do not count toward this limit.
Copay: A fixed dollar amount you pay for a covered medical service. For example, you may have a $30 copay when visiting your primary care doctor.
Coinsurance: The percentage of covered medical expenses you are responsible for, typically after meeting your deductible. For example, if your plan has 20% coinsurance, you pay 20% of the allowed cost while your insurance company pays the remaining 80%.
HMO (Health Maintenance Organization): A type of health insurance plan that generally requires you to use doctors and hospitals within a specific network, except for emergencies. Some HMO plans also require referrals to see specialists.
PPO (Preferred Provider Organization): A type of health insurance plan that generally gives you more flexibility when choosing doctors and hospitals. You can typically receive care both in and out of network, but going out of network will usually cost you more.
Why is understanding these terms important?
Because the cheapest monthly premium doesn't always mean the cheapest health insurance plan!
A plan with a lower monthly premium may come with a higher deductible or out-of-pocket maximum. On the other hand, a plan with a higher premium may provide better cost-sharing benefits when you actually need medical care.
As an independent insurance agent, I work with multiple insurance companies to help individuals, families, and employer groups understand their options and find coverage that fits their needs and budget.
With 2027 Open Enrollment approaching, now is a great time to review your coverage!
Give me a call at (701) 793-2013 or send me a message to get on my calendar.
