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Insurance Deductibles, Copays, and Coinsurance: What’s the Difference?

Written by Ilyce Glink on March 17, 2014 in Insurance  |   1 comment

Choosing the right health insurance plan can be a daunting task. In addition to deciding which coverage best suits your needs, you also have to cut through the jargon to ensure you’re accurately comparing health plans. As you shop for insurance, you’ll likely see four…

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Choosing the right health insurance plan can be a daunting task. In addition to deciding which coverage best suits your needs, you also have to cut through the jargon to ensure you’re accurately comparing health plans.

As you shop for insurance, you’ll likely see four terms over and over again: premium, copay, coinsurance, and deductible. All of these terms are important, and together they will help determine how much you pay for coverage.

The premium is the fixed amount you pay monthly, quarterly, or semi-annually for your health insurance. It depends on several factors, including the number of people insured on the plan, the cost of care in your area, and your age.

“Typically, a higher premium has a richer benefit plan,” says Teresa Vercollone, a client manager at Cigna Healthcare. A more expensive plan may offer better coverage and lower out-of-pocket costs, while a plan with a lower insurance premium may require you to pay a higher share of the cost when you receive care.

“I choose the lower premium because I can calculate my out of pocket and know that I won’t have to spend more than that amount,” Vercollone says. “It takes a little more planning,...

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