Health insurance in plain English

The fixed amount you pay to have insurance, usually taken out of each paycheck, whether or not you see a doctor.

Example. Maria pays $200 a month, so $2,400 a year, even in a year with no doctor visits. Premiums do not count toward your deductible or your out-of-pocket limit.

In this app: "Your premium" step for each plan.

What you pay for covered care yourself each year before the plan starts sharing the cost. Some services, like checkups, are covered before you reach it.

Example. Maria's deductible is $1,500. She has an $800 MRI and pays all $800. A month later a $1,000 scan comes: she pays the $700 left on her deductible, then 20% of the remaining $300, so $760 in all.

In this app: "Check the numbers" step.

A flat fee for a specific service, such as a primary care visit or a prescription. You usually pay it when you check in or at the pharmacy.

Example. Maria's plan has a $30 primary care copay. A visit the plan prices at $180 costs her $30; the plan pays the other $150.

Your share, as a percentage, of a covered bill once the deductible is met. The plan pays the rest.

Example. Maria has met her deductible and has a $2,000 procedure. At 20% coinsurance she pays $400 and the plan pays $1,600.

The most you can be asked to pay in a year for covered, in-network care. After you reach it, the plan pays everything covered and in-network for the rest of the year. Premiums, out-of-network balance bills and care your plan doesn't cover don't count toward it.

Example. Maria's limit is $5,000. She has a hospital stay with a $19,000 bill. Her deductible and 20% coinsurance add up to exactly $5,000, and when she goes back for a follow-up visit she pays $0.

In this app: "Check the numbers" step, and the cash-flow question near the end.

The price your insurer has agreed with an in-network provider for a service. Your deductible, copay and coinsurance are worked out from this, not from the provider's list price.

Example. A clinic lists an X-ray at $400, but it has agreed to $120 with your plan. Your costs are figured on $120.

Checkups, screenings and vaccines recommended for your age and health. Most plans cover these in-network at no cost to you, even before the deductible. A visit to treat a problem is not preventive.

Example. Maria's yearly physical costs her $0. If she mentions a sore knee and the doctor treats it, that part can be billed as a regular visit.

Paying a provider directly instead of using your insurance, for example a doctor who doesn't take insurance, or a cash price that is lower than your plan's. These payments usually don't count toward your deductible or out-of-pocket limit.

Example. Sam sees a therapist who doesn't take insurance for $150 a session. He pays $150 each time, and none of it moves him toward his deductible.

In this app: Choose "I'd pay out of pocket" when we ask whether a doctor is in your network.

The doctors, hospitals and pharmacies that have agreed to your plan's prices. Using them costs you less.

Example. Your plan's website lets you search for a doctor by name. If Dr. Lee is listed, she is in your network.

In this app: "Are your doctors in the network?" questions.

Providers with no agreement with your plan. Some plans pay part of the bill; some pay nothing except in an emergency. Out-of-network costs are often not counted toward your out-of-pocket limit.

Example. Your plan covers 60% of an out-of-network specialist's recognized price, and that provider can also bill you for the rest.

When an out-of-network provider bills you for the difference between what they charge and what your plan pays. A federal law (the No Surprises Act) protects you from this for emergencies and for many out-of-network providers at an in-network hospital.

Example. A surgeon charges $5,000. The plan recognizes $2,000 and pays part of that. The surgeon bills you the $3,000 difference on top of your share.

Approval your insurer must give before it will cover certain care, such as an MRI or surgery. Your doctor's office usually asks for it. Without it, the claim can be denied.

Example. Your doctor orders an MRI. The office sends the request, the plan approves it, and the scan is covered. If they skip that step, the plan may refuse to pay.

A note from your primary care doctor sending you to a specialist. Some plans (often HMOs) won't cover a specialist visit without one.

Example. You'd like to see a dermatologist. Under an HMO your primary care doctor writes the referral first. Under a PPO you can book directly.

A statement your insurer sends after a claim: what the provider billed, what the plan paid, and what you owe. It is not a bill.

Example. Your EOB says: billed $400, plan's price $120, plan paid $96, you owe $24. Wait for the provider's own bill and check that it matches.

A standard few-page summary every plan has to give you, with the deductible, out-of-pocket limit and what you pay for common services. Your benefits portal or your insurer's site has it.

Example. Upload your SBC (or photos of it) and the estimator reads the numbers for you to check.

In this app: "Your plan document" step.

The plan's list of covered drugs, sorted into tiers. The higher the tier, the more you pay: generics are usually the lowest tier, then preferred brands, non-preferred brands and specialty drugs.

Example. A plan might charge $10 for a generic, $40 for a preferred brand, $70 for a non-preferred brand and 20% for a specialty drug. A drug that isn't on the list may not be covered at all.

In this app: The prescription questions.

A plan where you pick a primary care doctor, use its network (except in emergencies) and usually need a referral to see a specialist. Costs are often lower, choice is narrower.

Example. Your primary care doctor coordinates your care and refers you to an in-network cardiologist.

A plan that lets you see any provider without a referral. It costs less to stay in network but still pays something out of network. Premiums are often higher.

Example. You can book a specialist directly. An out-of-network one costs more, but the plan still pays part.

Like a PPO without out-of-network coverage (except emergencies). You usually don't need referrals.

Example. You can see any in-network specialist directly, but an out-of-network one isn't covered.

A mix of HMO and PPO: you pick a primary care doctor who refers you, and you can go out of network for a higher cost.

Example. You get a referral for an in-network specialist, or pay more to go outside the network.

A plan with a lower premium and a higher deductible that meets IRS rules. It is the kind of plan that lets you open a Health Savings Account (HSA).

Example. You pay less each paycheck but more out of pocket early in the year. It can suit you when you are healthy and can save for the unexpected.

A savings account you can open with a high-deductible plan. Money goes in before tax, can be spent tax-free on medical costs, rolls over each year and is yours to keep if you change jobs. The IRS sets a yearly limit that includes any money your employer adds.

Example. For 2026 the limit is $4,400 for self-only coverage and $8,750 for family coverage. If your employer adds $1,000, you can add up to $3,400 yourself (self-only).

In this app: "HSA, FSA and employer money" step.

Pre-tax money from your paycheck for medical costs, set up through your employer. It usually has to be used within the plan year, though some plans allow a small carryover or a grace period.

Example. For 2026 you can put in up to $3,400. If you put in $1,000 and spend only $700 on eligible costs, you may lose the rest (check your plan's carryover).

Money your employer sets aside to repay certain medical costs. You can't add to it, and it usually doesn't go with you if you leave.

Example. Your employer gives you $500. You pay a $300 bill, submit the receipt and are repaid $300; $200 is left.

If you are covered by two plans, one pays first (primary) and the other may pay part of what is left (secondary). Together they never pay more than the bill. For your own coverage, your employer plan is usually primary. For a child on two parents' plans, the plan of the parent whose birthday comes earlier in the calendar year is usually primary.

Example. A $1,000 bill: the primary plan pays $800 and you'd owe $200. The secondary plan may then cover some or all of that $200, depending on its own rules.

In this app: "Other coverage" section, and the question about which plan pays first.

Extra policies that pay you fixed cash amounts for certain events, whatever your medical plan pays. They don't replace health insurance, and you pay their premium.

Example. A hospital indemnity policy pays $1,000 per admission plus $200 per night. A three-night stay pays you $1,600 in cash.

In this app: "Other coverage" section.

An extra amount some employers charge to keep a spouse on your plan when that spouse has coverage available through their own job.

Example. Your employer adds $100 a month for a spouse who could be covered at work. That is $1,200 a year on top of the premium.

With an embedded deductible each person has their own smaller deductible, so one person's costs can start being shared before the whole family's deductible is met. With an aggregate (non-embedded) deductible nothing is shared until the family's costs together reach the full family deductible.

Example. Under an embedded $1,500 / $3,000 plan, one child who reaches $1,500 starts getting coinsurance right away. Under an aggregate $3,500 / $7,000 plan the family has to reach $7,000 together first.

In this app: "Embedded or aggregate" question in "Check the numbers".

Federal health insurance, mostly for people 65 and older. Part A covers hospital care, Part B covers doctors and outpatient care, Part D covers drugs. Medicare Advantage (Part C) is a private plan that replaces Parts A and B. Medigap is a policy that helps pay what Parts A and B leave.

Example. Someone working at a company with 20 or more employees often keeps the employer plan as primary and Medicare as secondary.

In this app: "Other coverage" section.

Government programs that cover people with lower incomes. CHIP covers children in families that earn too much for Medicaid but can't easily afford private coverage. Eligibility and benefits depend on your state.

Example. A child can be on a parent's employer plan and on Medicaid; Medicaid is usually the last to pay.

The yearly window when you can choose or change your health plan. Miss it and you usually can't change until next year unless you have a qualifying life event.

Example. Your employer's window runs for two weeks in the fall for coverage starting January 1.

In this app: "Next year or the rest of this year?" question.

A change in your life that lets you enroll or change plans outside open enrollment, such as marriage, a new baby, adopting, moving, or losing other coverage. You typically have only 30 or 60 days to act.

Example. You have a baby in March. You can add the baby to your plan within the window instead of waiting until the next open enrollment.

A federal rule that lets you keep your employer's plan for a limited time after you leave a job. You pay the whole premium yourself plus a small fee, so it costs much more than when your employer shared it.

Example. If your employer paid most of a $700 monthly premium, COBRA could cost you about $700 a month plus a small fee.