How to Choose a Health Insurance Plan: Premiums, Deductibles and Out-of-Pocket Max
🇩🇪 Diesen Artikel auf Deutsch lesenCompare plans by your expected total cost for the year: premiums plus what you would pay for care. Low-premium, high-deductible plans suit healthy people with an emergency fund; plans with higher premiums and lower deductibles suit those who expect regular care. Always check the out-of-pocket maximum — it is your worst-case cost.
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Whether you choose through your employer or the Health Insurance Marketplace, health plans can look confusing. Four numbers tell you most of what you need to know.
The four key numbers
- Premium: what you pay every month, whether you use care or not.
- Deductible: what you pay for covered care before the plan starts sharing costs (preventive care is usually covered before the deductible).
- Copay / coinsurance: your share after the deductible — a fixed fee per visit or a percentage of the bill.
- Out-of-pocket maximum: the most you pay in a year for covered in-network care. After that, the plan pays 100%.
Compare total yearly cost
| Plan A (high deductible) | Plan B (low deductible) | |
|---|---|---|
| Monthly premium | $250 | $450 |
| Yearly premiums | $3,000 | $5,400 |
| Deductible | $4,000 | $1,000 |
| Out-of-pocket max | $7,500 | $5,000 |
| Cost in a healthy year | about $3,000 | about $5,400 |
| Worst case | $10,500 | $10,400 |
In this example the high-deductible plan saves $2,400 in a healthy year and costs about the same in the worst case. If you expect surgery, a pregnancy or ongoing treatment, run the numbers with your expected costs.
HSA: a tax bonus for high-deductible plans
If your plan qualifies as a high-deductible health plan (HDHP), you can contribute to a Health Savings Account. Contributions are tax-deductible, growth is tax-free, and withdrawals for medical expenses are tax-free. Unused money rolls over every year and can be invested — many people treat it as an extra retirement account.
Compound Interest CalculatorSee how your savings grow over timeTry the calculator →Check the network
HMOs usually require you to stay in network and get referrals; PPOs cost more but let you see out-of-network providers at higher cost. Before enrolling, confirm that your doctors, preferred hospital and prescriptions are covered.
Marketplace plans and subsidies
If you don't have affordable coverage through work, you can buy a plan at HealthCare.gov or your state's marketplace during open enrollment, which in most states starts November 1. Premium tax credits depend on your income and household size; check the current rules for your situation, because subsidy levels have changed over time.
Frequently asked questions
What happens if I miss open enrollment?
You can enroll outside open enrollment only with a qualifying life event, such as losing other coverage, moving, marriage or having a baby — usually within 60 days.
Is preventive care free?
Most plans must cover many preventive services, such as annual checkups and recommended screenings, without cost-sharing when you use an in-network provider.