A deductible is the amount a person pays each year for most eligible medical services or medications before their health insurance begins to contribute to the cost of covered services.

Imagine that a person has been having trouble with their back. They decide to see a chiropractor to get adjusted and, thankfully, it works! They’re so pleased with the results that they continue to return every other week. 

Let’s say that their health insurance covers 70% of the cost for each of their visits to the chiropractor. They’re left to pay the rest out of pocket, which ends up being $60 per visit. This amount that they pay which isn’t covered by insurance counts towards their deductible—a preset amount that resets at the end of each benefits renewal period. (The deductibles can also change, depending on your coverage.) 

Once they’ve met or exceeded the amount designated by their deductible, the health insurance covers the rest of their qualifying medical costs through the end of the coverage period.

Copays are preset amounts that individuals pay to medical providers after medical visits or services, and can range from $10 to $60 (or higher, depending on the care). Copayments count towards a person’s deductible. 

Coinsurance represents the amount a person must pay after their deductible has been met. It serves as a way of indicating that you and your insurance carrier each pay a share of eligible costs that add up to 100%. While some plans pay for the entirety of medical costs in these instances, others don’t cover the whole amount.

Related: Employee Benefits Guide