Insurance basics
Health insurance terms, explained simply
Understanding your coverage makes it easier to choose a plan that fits your budget and your doctors. Here is what every shopper should know.
What is a deductible?
- Your deductible is the amount you pay out of pocket for covered health care before your insurance plan starts to share costs.
- If your plan has a $1,500 deductible, you pay the first $1,500 of covered medical bills each plan year.
- After you meet the deductible, you usually pay only a copay or coinsurance for covered services.
Why your deductible matters
- A lower deductible often means a higher monthly premium — but less surprise spending when you need care.
- A higher deductible usually means a lower monthly premium — better if you rarely see a doctor, but riskier if something unexpected happens.
- Choosing the right deductible is about balancing your monthly budget with your ability to cover a sudden medical bill.
HMO vs PPO
- HMO plans typically require you to choose a primary care doctor and get referrals to see specialists. They often have lower premiums and lower out-of-pocket costs.
- PPO plans give you more flexibility. You can see specialists without a referral and visit out-of-network doctors, though it usually costs more.
- If you have doctors you want to keep, check whether they are in the plan's network before you enroll.
Private vs Marketplace plans
- Marketplace plans (Healthcare.gov) are ACA-compliant and may come with income-based tax credits that lower your monthly premium.
- Private plans are bought directly from insurance companies. They can be a good fit if you do not qualify for subsidies or want different provider networks.
- Both types can cover essential health benefits, but costs, networks, and prescription coverage vary widely by plan.
Still have questions?
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