Health insurance helps protect you from the high costs of health care. It helps you pay for doctor visits, hospital stays, prescription drugs and important preventive care.

You can choose from a variety of health insurance plans with different levels of coverage to fit your needs and budget.

A health plan example

Let’s say you’ve had a serious accident. Your medical bills are $50,000. Health insurance may make a huge difference in the amount you’ll pay. In this example, all the care you receive is from doctors and hospitals in your plan network.*

Your costs in this example

  • Yearly deductible: $5,000
  • Coinsurance: 20%
  • Yearly out-of-pocket maximum: $6,000

How it works

  1. In this example, you pay the first $5,000 (your deductible) before your plan begins to pay.
  2. After you pay the deductible, you pay 20 percent of your health care costs until you reach your maximum out-of-pocket amount ($6,000). That means you only pay $2 out of every $10 for covered services until you’ve paid $6,000.
  3. Once you’ve paid $6,000, your health plan pays the rest of the cost for covered services you receive in network.

Total amount you’d pay in this example:

  • Bill for services: $50,000
  • You pay: $6,000
  • Your plan pays: $44,000

Health insurance definitions

Coinsurance: The percent of the cost you pay for covered services. For example, you pay 20 percent of the cost for a doctor’s office visit or hospital stay. Your plan pays the other 80 percent. Not all plans include coinsurance.

Copay: A small, flat fee you pay for some covered care at the time of service (for example, $25 for an office visit). Some plans do not require a copay.

Covered costs: Medical tests, office visits, treatments, supplies, medications and services your plan covers. To find out what your plan covers, log into the member site, call the number on the back of your ID card or check the contract in your member welcome kit.

Deductible: The amount you pay for health care each year before your plan begins to pay.

Formulary: A list of drugs your plan covers. If you fill a prescription for a drug your plan doesn’t cover, you’ll pay the full cost. This cost will not count toward your deductible or out-of-pocket maximum. How to understand prescription drug benefits

Health savings account: Before-tax contributions you make to an HSA account. You can use HSA funds to pay for some covered health care costs. See how a health savings account (HSA) works. See how a health savings account (HSA) works.

Network: The hospitals, doctors, pharmacies and health care professionals that sign a contract with a health plan to provide care or prescription drugs for its members. These are also known as participating or in-network providers. To get the most coverage, you receive care from providers in your health plan network and pharmacies in your plan’s pharmacy network. Some providers or pharmacies may not be in a plan’s networks. Providers or pharmacies in one network may not be in another network. Some plans have a focused network. A focused network means that only certain providers or pharmacies participate in the plan’s provider or pharmacy networks. If you visit a provider or a location that is not in the plan network, you will pay more for your care. If you get a drug from a pharmacy that’s not in the plan network, you will pay more, or even the full cost for your drug. These out-of-network costs do not count toward your in-network cost-sharing (for example, your deductible and out-of-pocket maximum).

Out-of-pocket maximum: The most you could pay each year for covered services you receive in network.

Premium: The monthly amount you pay for your health plan. Usually, a lower premium comes with a higher deductible and out-of-pocket maximum.

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