Almost all health insurance has “cost sharing”, the portion of the bills for medical services and prescription drugs, as the insured, you’re responsible to pay.
That can come in the form of deductibles, co-pays, coinsurance, and the Maximum Out of Pocket (MOOP), all of which must be disclosed in your plan’s Summary of Benefits. Today I will explain how the different forms of cost sharing work.
The deductible is the amount of money that must be paid before the insurance company begins to cover claims. In other words, you’re responsible for 100% of the allowable billable charges for any service that’s subject to the deductible until that set dollar figure has been met.
On some plans, everything, including doctor visits and prescriptions, is subject to the deductible with the exception of “preventative services.” These plans are usually paired with a Health Savings Account and are referred to as HDQHPs, which stands for High Deductible Qualified Health Plan.
If you have employer coverage or an Affordable Care Act (ACA) plan, also known as an Obamacare, and your spouse and/or children are on the policy, it’s important to understand if your deductible is “embedded” or “non-embedded.” Embedded is generally better because there’s a lower individual deductible each person has that’s separate from the higher family deductible. Embedded means one person can’t meet the whole family deductible by themselves. With a non-embedded plan however, one person can meet the entire family deductible. Generally, the only plans with non-embedded deductibles are HDQHPs.
A co-pay is a set fixed dollar amount you pay for specific services such as physician office visits and prescription drugs. Co-pays aren’t subject to the deductible, making them less expensive. Some plans may also have co-pays for urgent care, the emergency room, blood work, or X-rays. What I call major medical services; CT scans, MRIs, outpatient surgery, hospitalizations, and other more expensive procedures or tests are almost never provided on a co-pay basis and are subject to your deductible.
Major medical services are also subject to coinsurance, which is a percentage of the bill you’re responsible for after the deductible has been met. Coinsurance is an additional charge over and above the deductible and can range from 0% to 40%. When evaluating plans, I’m just as or more concerned about coinsurance than the deductible because it can result in thousands of dollars in additional medical bills. Coinsurance is often overlooked but something that people need to keep an eye on at renewal time or Open Enrollment. You may not have had it in the past, or it was low, but as time passes, it may be added or the percentage increased.
I’m also very concerned about the Maximum Out of Pocket (MOOP) when helping clients choose their health insurance plan. The MOOP represents the most money that can be billed in a calendar year and in 2026, may be as high as $10,600 per person. Every single covered service you’re billed for counts towards the MOOP, from the $5 co-pay for generic drugs to the $10 or $20 charge at your primary doctor, to the deductible and any coinsurance that’s charged. Once those bills equal the MOOP, all services for the rest of the benefit year are provided at $0. Although the benefit year for ACA plans always runs January 1st through December 31st, with employer plans it can be any 365-day period.
If you have coinsurance, and are hospitalized or need expensive outpatient surgery, infusion or injection therapy, you will likely meet your MOOP, especially if it’s 20% or more.
A huge part of our business at The Health Insurance Store is helping people apply and in ACA/Obamacare plans. If you are enrolling for the first time or would like your current plan reviewed, there’s no charge for a consultation. In addition, as a courtesy, we also advise people regarding employer health coverage. For an appointment call our office at 724-603-3403 or email me personally, Aaron@GetYourBestPlan.com.