The words that cost people money, on a plan that looks like yours.
Most people know what "deductible" means. What they miss is that a deductible does nothing on its own. It only makes sense next to a coinsurance split and a ceiling, on one document, in one year. So here's that document. Scroll it, and I'll explain each number as you reach it.
Example only · not a quoteSilver-level plan · one adult, 38, non-smoker
Monthly premium$412$4,944 a year
Annual deductible$3,500in-network
Primary care visit$40 copaybefore the deductible
Specialist visit$85 copay
Generic prescription$15 copay
Everything else, after the deductible80 / 20the plan pays 80%
Out-of-pocket maximum$8,000then the plan pays it all
NetworkPPOout-of-network costs more
Plan yearJan 1 – Dec 31
Illustration only. Not a quote, not an offer, and not a plan you can buy from this page. Real premiums, deductibles, networks and copays vary by state, by carrier, by household and by plan year.
01 · Premium
$412 a month, whether you see a doctor or not
This is the only number most people compare, and on its own it tells you almost nothing. It buys you nothing but the right to use the plan. A $200 premium with an $18,000 deductible is not a cheap plan. It is a cheap month and an expensive year, and that trade is the single most common way people end up underinsured without knowing it.
Over twelve months this one costs $4,944 before a single appointment. Hold that number: it comes back at the bottom.
02 · Deductible
$3,500 you pay yourself first
Before the plan pays its share of most things, you pay the first $3,500 of them. Not per bill. Per year, adding up. Break an ankle in February and you meet it in one afternoon; have an ordinary year and you may never touch it at all.
It resets every January, which is why a surgery scheduled in December and a surgery scheduled in January can be thousands of dollars apart for the same operation.
03 · Copay
$40 to sit in front of your doctor
A flat fee for one specific thing, and on this sheet the copays work before the deductible. You pay $40 for the visit in March even though you have not spent a cent toward the $3,500. That is what makes a plan feel usable in a normal year.
Some plans do it the other way and make you clear the deductible first. Some count copays toward the out-of-pocket maximum and some don't. This is worth asking about on every plan you are shown, and it is rarely on the front page.
04 · Coinsurance
After the $3,500, you still owe 20%
"80/20" means the plan pays 80% of what comes next and you pay the rest. People read the deductible as the finish line; it is the point at which the plan starts helping, not the point at which it takes over.
On a $48,500 hospital bill, 20% is $9,700. Which is exactly why the next line on the sheet exists.
05 · Out-of-pocket maximum
$8,000, and then it stops
The ceiling. Once your deductible and coinsurance together add up to $8,000 in covered in-network care, the plan pays 100% of the rest of the year. This is the first number I look at, on every plan, before the premium, because it is the one that decides whether a bad year is expensive or ruinous.
Two plans with the same premium and the same deductible can have ceilings $6,000 apart. That difference is invisible on every comparison site I have ever seen.
06 · Network, and the three letters on the front
PPO, which is a word and not a promise
The network is the list of doctors and hospitals that agreed to the plan's prices. In network, everything above applies. Out of network, care can be partly covered, barely covered, or not covered at all, and the out-of-pocket ceiling you were relying on usually does not apply to it.
The letters on the front of a plan tell you how its network works. HMO, EPO, PPO, POS: nobody says the words out loud, but they decide whether your doctor is covered and whether the plan is any use to you out of state. And "PPO" printed on a plan with a network of eleven doctors is still a PPO. Checking that your own doctors are in it, by name, is thirty seconds of work and it is the check people skip.
07 · All of it, in one bad year
A $52,000 hospital stay, on this plan
This is the year nobody plans for, run through the sheet line by line. You pay the deductible, then a fifth of what follows, until the ceiling catches you.
Premiums, twelve months$4,944
The deductible, paid first$3,500
20% of the remaining $48,500, capped by the $8,000 ceiling$4,500
The carrier's share$44,000
What the year costs you$12,944
Now compare that to the same year on a plan advertised at $200 a month with an $18,000 deductible, and you can see why I will not quote you a premium without the other three numbers beside it.
06 · The three letters
HMO, EPO, PPO and POS, across six questions
HMO, EPO, PPO and POS plan types compared across six questions
Question
HMO
EPO
PPO
POS
Seeing a specialist
Your primary doctor refers you first
Go straight there, no referral
Go straight there, no referral
Referral first, same as an HMO
Out-of-network care
Not covered, outside an emergency
Not covered, outside an emergency
Covered, at a worse rate than in-network
Covered, at a worse rate than in-network
Network size
Usually the tightest, and usually local
Local to regional, often no national reach
Usually the broadest, often a national one
A local network with a door out of it
Does it travel?
Emergencies anywhere. Routine care, no
Emergencies anywhere. Routine care, no
Usually, if the network is a national one. Check the plan, not the letters
Partly, at the out-of-network rate
Typical premium
Lowest of the four
Low to middle
Highest of the four
Middle
What you're trading
Choice, for price
The referral step, for a tighter network
Money, for freedom
A referral, for an escape hatch
Carriers build and name these differently, and two plans wearing the same three letters can have completely different networks. The letters narrow it down; the plan document settles it. This is also the row that decides whether my being licensed in thirty-one states matters to you at all. A license is where I can sell, a network is where the plan pays.
And three words that are not on the sheet at all, because they decide which sheet you get in the first place.
Underwriting
The health review on a private plan. It's how you get a lower price for being healthy, and it's also how a condition ends up excluded.
Special enrollment period
A window opened by a life event (losing coverage, moving, marrying, having a baby) that lets you enroll outside the normal season. They expire.
Guaranteed issue
The plan has to take you regardless of health. That's the trade the Marketplace makes, and it's why its pricing works the way it does.
Still reading
There's a longer piece behind this one: the whole market written out, why each part of it
exists, who it helps, why flexibility matters more than price for some people, and
where people get hurt. About twenty minutes, and there's no pitch in it.
That sheet's an example. Yours takes a twenty-minute call.
Every figure on it moves with your state, your age, your household, your doctors and the carriers that'll write you this year. On the call I'll put the real plans side by side, ceiling first, and you'll read the same lines you just read, with your own numbers in them.
