We all know the concept of health insurance. Understanding how it works to help pay for your health care is not always easy.
Let's focus on two popular types of health insurance plans: high deductible plans and copay plans. Both types of plans follow a similar structure but manage costs in different ways.
Phases of a health plan
How the plans pay can be broken down into three phases:
- Deductible phase: This is when you pay the entire cost of care.
- Coinsurance phase: This is when you pay some and the insurance company pays some.
- Out-of-pocket maximum: After you reach this, the insurance company pays in full.
Different health plan types
- With a high deductible plan, you pay the entire cost of your annual deductible before insurance kicks in. Get more details about high deductible plans.
- With a copay plan, you usually pay a set fee for doctor or pharmacy visits. These payments DO count toward your out-of-pocket maximum. However, they DON'T count toward your deductible. Find out more about how copay plans work.
It's important to weigh all costs when choosing your plan. Watch the video for more detail on how high deductible and copay plans work to manage costs and see which one may work best for you.
Note: Grandfathered health plans offered by some employers cover preventive care differently than these illustrations. See your benefit plan documents for coverage details.
