by Kaiser Permanente | October 21, 2025
Many people feel confused about health care costs. What’s a deductible? Do I have a copay? How much will I actually pay?
When you’re choosing a health plan, it helps to understand these terms. Knowing what they mean can make it easier to find a plan that fits your health needs and budget.
Here’s some common health care terms you should know — so you can choose the right health plan for you.
Every health plan includes a list of medical care it will pay for called covered services. Examples may include:
If a service isn’t covered, the health plan won’t pay for it. That means you’ll be responsible for the full cost.
Your monthly membership fee — called a premium — keeps your health coverage active. If you get coverage through work, the money usually comes straight from your paycheck. If you have an individual plan, you send the payment yourself.
Generally, the higher your monthly fee is, the more your plan covers for medical care. Lower monthly fees may mean you’ll pay more when you get care.
Every health plan has rules about how much it will pay for services and how much you will pay yourself. The amount you pay yourself is called an out-of-pocket cost. That means you, not your health plan, pay for these medical services or items. You aren’t reimbursed. Here are some of the most common out-of-pocket costs:
These costs all count toward your annual out-of-pocket maximum. That’s the yearly limit on what you’ll spend before your plan pays for most services in full.
A deductible is the amount you’ll pay for certain health care services each year before your plan starts to help with the cost. These are often higher-cost or less frequent services — like MRIs, hospital stays, or emergency care. You pay the full cost of covered services until you reach your deductible.
For example, if your deductible is $1,000, you’ll pay the first $1,000 of deductible services yourself. After that, your plan begins to share the cost.
If you mostly get routine care — like annual checkups or basic labs — you may only pay a few small copays and never touch your deductible. But it’s still good to be prepared to pay up to that amount. Your deductible starts over each year, so you’ll need to meet it again before your plan helps pay for covered services.
For many common services — like routine doctor visits and preventive care — you’ll usually just pay a copay. A copay is a flat fee that you pay at the time of care. It doesn’t count toward your deductible, and you still pay it even after your deductible is met. You may also have different copay amounts for different types of services. For example, your plan might have a $20 copay for doctor visits and a $10 copay for prescriptions.
That means that when you check in for a doctor’s appointment, the receptionist might tell you that you owe a $20 copay for your visit. If your doctor writes you a prescription during your visit, then the pharmacy staff may ask you to pay a $10 copay to fill the prescription.
Coinsurance is a percentage you pay for specific services after you meet your deductible. For example, if a procedure costs $100 and your coinsurance is 20%, then you’ll owe $20 for that procedure.
Coinsurance is often confused with copays, but they’re not the same. Your plan may have copays or coinsurance — or it may have both — that will apply to different types of services. If your plan has a copay and coinsurance, then there are some cases where you might be asked to pay both during a doctor visit.
All the money you spend on your deductible, copays, and coinsurance counts toward your yearly out-of-pocket maximum (OOPM). This is the most you’ll have to pay yourself for covered care in a year. Once you hit that limit, your health plan pays 100% of covered costs for the rest of the year.
However, you’ll still need to pay your monthly fees and the cost of any services that your plan doesn’t cover.
Depending on your plan type, you may be able to save money for health care expenses with health savings accounts. There are 3 main types of accounts:
An HSA lets you and your employer put aside tax-free1 dollars to help pay for some expenses. You can use this money to pay for certain medical costs, like doctor visits, prescriptions, or lab tests. The IRS decides what an HSA can cover, and your health plan will give you the full list. Your account can earn interest, and you can keep the money if you change jobs or retire.
An HRA is an account your employer puts money in to help you pay for health care. Employers decide the specific rules for their HRAs, including what costs the accounts can cover and whether unused money rolls over year to year.
An FSA lets you and your employer set aside money for health expenses like glasses or dental care. Most FSAs have a “use it or lose it” rule. That means if you don’t spend the money by the end of the year, you lose it. The account belongs to your employer, so you also lose any leftover money if you change jobs or retire.
Now that you know common terms, it’s important to understand how they work together to impact health care costs. Here’s an example.1
Emily has a deductible HMO plan. This plan has:
Emily also has an HSA account with a current balance of $20.
While playing softball, Emily hurts her ankle. She goes to her primary care doctor to have it checked out. When she arrives at the doctor’s office, the receptionist asks her to pay a $20 copay for the visit. Emily uses her HSA account to pay using the tax-free2 money from her employer.
During the visit, Emily’s doctor believes she may have ruptured a tendon and recommends she get an MRI, which will cost $2,000. Emily will need to pay the entire cost of the MRI, but it will go toward meeting her deductible for the year.
The MRI reveals that Emily has torn her Achilles tendon and will need surgery, which will cost $5,000.
Now that Emily’s deducible has been met, her coinsurance will kick in. That means her health plan will cover 80% of the costs of covered services. Emily will only need to pay $1,000 (which is 20%) of the $5,000 cost of her surgery.
Paying for her surgery also met Emily’s $3,000 out-of-pocket maximum for the year. So that means she won’t have to pay anything for her follow-up visits after surgery — her health plan will cover the full cost. It also means that if another injury or illness were to happen again within the same year, Emily may not need to pay a copay, coinsurance, or deductible.3
To get a general sense of your yearly health plan costs, add together:
The right plan depends on your health needs.
If you’re generally healthy and mostly use preventive care, you may not come close to meeting your deductible. A plan with a lower monthly fee and higher deductible might save you money overall, while still protecting you if something major happens.
If you have chronic conditions or expect frequent care, a higher monthly fee may be worth it. Plans with lower deductibles, lower copays, and lower out-of-pocket maximums often save money in the long run when you know you’ll use a lot of care.
At Kaiser Permanente, you have many convenient ways to manage your care and costs. Simply sign in to your kp.org account to view your costs and coverage.
Learn how much you could pay for your care and services.
Your benefit summary tells you what your plan covers.
Footnotes
Sign out
