What is the difference between a deductible and an out-of-pocket maximum?

A deductible is the amount you pay before your insurance starts sharing costs. The out-of-pocket maximum is the total cap on what you'll ever pay in a year — once you hit it, insurance covers 100%. Your deductible counts toward your out-of-pocket maximum.

What is the difference between a copay and coinsurance?

A copay is a fixed dollar amount (e.g., $30 per visit) you pay for a specific service. Coinsurance is a percentage (e.g., 20%) of the total cost you pay after meeting your deductible. You may have one or both depending on your plan and service type.

What is the difference between HMO and PPO health insurance?

HMOs require you to use in-network doctors and get referrals to see specialists — but typically have lower premiums. PPOs let you see any doctor (in or out of network) without a referral, at higher premiums. HMOs work well if you have a primary care doctor you like; PPOs work well if you need specialist flexibility.

What does 'in-network' mean on a health insurance plan?

In-network means a doctor or hospital has a contract with your insurer and agreed to accept reduced rates. When you use in-network providers, your plan's standard copays and coinsurance apply. Out-of-network visits cost significantly more, and some plan types (HMO, EPO) don't cover them at all except in emergencies.

Health Insurance Glossary 2026 — 50+ Terms Defined Simply

Cost Basics

Health insurance involves several different cost components. Understanding how they interact helps you choose a plan that fits your actual healthcare usage.

Premium: The monthly amount you pay for your health insurance plan, whether or not you use any medical services. Like a subscription fee — you pay it every month to keep your coverage active. Premiums vary by plan, age, and location. ACA subsidies (premium tax credits) reduce this amount for eligible households.; Related: Premium Tax Credit
Deductible: The amount you must pay for covered medical services each plan year before your insurance begins sharing costs. Example: With a $1,500 deductible, you pay the first $1,500 of medical bills yourself. After that, the insurer starts paying its share. Preventive care is usually covered before the deductible is met.; Note: Your deductible counts toward your out-of-pocket maximum.
Copay (Copayment): A fixed fee you pay for a specific service, regardless of its total cost. Example: A $30 copay for a primary care visit means you always pay $30. Copays for specialist visits, urgent care, and prescriptions are typically listed in your plan's Summary of Benefits.
Coinsurance: After meeting your deductible, coinsurance is the percentage of costs you split with your insurer. Example: With 80/20 coinsurance, your insurer pays 80% and you pay 20% of covered services. Coinsurance applies until you reach your out-of-pocket maximum.
Out-of-Pocket Maximum: The most you will ever pay for covered medical services in a plan year. Once you reach this limit, your insurance covers 100% of covered costs. For 2026, federal limits are $9,450 for individuals and $18,900 for families. Your premium does not count toward this limit.
Explanation of Benefits (EOB): A statement from your insurer after a medical claim explaining what was billed, what was covered, what the insurer paid, and what you owe. An EOB is not a bill — it's a record of how your insurance processed the claim.

Plan Types

Health insurance plans come in several structures that determine which doctors you can see, whether you need referrals, and how much you pay.

HMO (Health Maintenance Organization): Requires you to choose a primary care physician (PCP) who coordinates your care. You need referrals to see specialists. Coverage is limited to in-network providers except emergencies. Pros: Lower premiums, predictable costs. Cons: Less flexibility, restricted network.
PPO (Preferred Provider Organization): You can see any doctor, including specialists, without a referral. Out-of-network care is covered but at a higher cost. Pros: Maximum flexibility. Cons: Higher premiums than HMOs. Best if you have ongoing specialist relationships or need out-of-network care.
EPO (Exclusive Provider Organization): Must use in-network providers (no out-of-network coverage except emergencies), but no referrals needed for specialists. A middle ground between HMO and PPO — more flexibility than HMO, lower premiums than PPO.
HDHP (High-Deductible Health Plan): Any plan with a deductible of at least $1,650 (individual) or $3,300 (family) in 2026. HDHPs qualify you for a Health Savings Account (HSA). Best for: generally healthy individuals who want lower premiums and to build HSA savings for future medical expenses.
Catastrophic Plan: Very low premiums, very high deductible. Available only to people under 30, or those with a hardship exemption. Covers 3 primary care visits/year before the deductible, plus preventive care. Not eligible for premium tax credits.

ACA & Subsidies

ACA (Affordable Care Act / Obamacare): Federal law signed in 2010 that created the health insurance Marketplace, required insurers to cover pre-existing conditions, allowed children to stay on parents' plans until age 26, and established the subsidy system for eligible consumers.
Premium Tax Credit (PTC / APTC): A government subsidy that reduces your monthly health insurance premium. Calculated based on your income relative to the Federal Poverty Level and the cost of the benchmark Silver plan in your area. You can apply it "in advance" to lower your monthly bill, or claim it as a tax credit when you file your taxes.
Cost-Sharing Reduction (CSR): An extra subsidy that lowers your deductible, copays, and out-of-pocket maximum. Available only on Silver-tier Marketplace plans for households with income between 100%–250% of the Federal Poverty Level. If you qualify for CSRs, always buy a Silver plan — it's built into Silver pricing by law.
Federal Poverty Level (FPL): A government income threshold used to determine eligibility for subsidies and Medicaid. In 2026, 100% FPL is approximately $15,060 for a single person and $31,200 for a family of four. ACA premium tax credits are available to households earning 100%–400% FPL (with enhanced subsidies extending help to higher incomes).
Metal Tiers (Bronze / Silver / Gold / Platinum): ACA plan categories based on how costs are split between you and the insurer. Bronze: ~60% insurer / 40% you (lowest premium). Silver: ~70/30 (unlocks CSRs). Gold: ~80/20 (lower out-of-pocket). Platinum: ~90/10 (highest premium, lowest costs). The metal tier doesn't reflect quality of care — only cost structure.

Enrollment & Coverage Terms

Open Enrollment Period (OEP): The annual window to enroll in or change Marketplace health plans for the next year. Federal Marketplace: November 1 – January 15. Some state exchanges extend to January 31. Outside OEP, you must have a qualifying life event to change plans.
Special Enrollment Period (SEP): A 60-day window to enroll or change coverage outside of open enrollment, triggered by a qualifying life event. Common qualifying events: losing employer coverage, marriage, divorce, having a baby, adopting a child, moving to a new state, or aging off a parent's plan at 26.
Prior Authorization: Your insurer's advance approval for certain medical procedures, specialist visits, or medications. Without prior authorization, the claim may be denied. Your doctor's office typically handles this, but always confirm before a procedure.
Formulary: Your plan's list of covered prescription drugs, organized into cost tiers. Tier 1: generic drugs (lowest copay). Tier 2: preferred brand-name drugs. Tier 3: non-preferred brands. Tier 4: specialty drugs (highest cost). Always check the formulary before enrolling if you take regular medications.

Government Health Programs

Medicaid: Free or very low-cost health coverage for people with low incomes, jointly funded by federal and state governments. In the 38 states that expanded Medicaid under the ACA, adults earning up to 138% FPL qualify. Benefits and eligibility vary by state.
Medicare: Federal health insurance for adults 65+ and certain people with disabilities. Divided into: Part A (hospital), Part B (medical/outpatient), Part C (Medicare Advantage), Part D (prescription drugs). You don't sign up through the ACA Marketplace — enroll at SSA.gov or Medicare.gov.
Medicare Advantage (Part C): An alternative to Original Medicare, offered by private insurance companies approved by Medicare. Bundles Part A, Part B, and usually Part D into one plan. Often includes extra benefits (dental, vision, hearing). Many plans have $0 monthly premiums. See our full Medicare Advantage guide.
CHIP (Children's Health Insurance Program): Low-cost or free health coverage for children in families who earn too much to qualify for Medicaid but cannot afford private insurance. Available in all 50 states. Some states also cover pregnant women through CHIP.
COBRA: Allows you to continue your employer's group health coverage after leaving a job (voluntarily or involuntarily) for up to 18 months (36 months in some circumstances). You pay the full premium — both the portion you paid as an employee and what your employer paid — plus a 2% admin fee. Often expensive; compare with ACA Marketplace plans before choosing COBRA.

Health Savings Accounts

HSA (Health Savings Account): A tax-advantaged savings account available only to people enrolled in an HDHP. Triple tax benefit: contributions are pre-tax, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. 2026 contribution limits: $4,300 (individual), $8,550 (family). Funds roll over indefinitely — never expire.
FSA (Flexible Spending Account): An employer-sponsored pre-tax account for medical expenses. 2026 contribution limit: $3,300/year. Unlike an HSA, FSA funds generally expire at year-end ("use it or lose it"), though some plans offer a $660 rollover or 2.5-month grace period. Not available if you're self-employed.

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Health Insurance Glossary