Deductible, Copay, Coinsurance, Out-of-Pocket Max: How They Fit Together

Four terms decide what you pay for care over a year. The premium is your monthly payment to keep coverage active. The deductible is what you pay first before the plan starts sharing costs. The copay is a flat fee per visit or service. Coinsurance is your percentage of the bill after the deductible. And the out-of-pocket maximum caps your total for the year — for 2027, federal rules cap it at $12,000 per person / $24,000 per family. No plan can set it higher.

The four pieces, in plain English

Premium — the monthly bill. You pay it whether or not you use care, and it keeps your coverage active. Important: premiums do not count toward your deductible or your out-of-pocket maximum.

Deductible — what you pay first. This is the amount you pay for covered services each plan year before your plan starts paying its share. (Many plans cover some services — like copay visits — before the deductible is met. Check your plan's documents.)

Copay — the flat fee. A fixed amount for a specific service, for example a set fee for a primary care visit or a generic prescription. Copays typically do not count toward your deductible, but they usually do count toward your out-of-pocket maximum. Plan rules vary — yours is the authority.

Coinsurance — your percentage. After you've met the deductible, you pay a percentage of the allowed amount and the plan pays the rest. "20% coinsurance" means you pay 20% and the plan pays 80%.

Out-of-pocket maximum — the yearly cap. The most you'll pay in a plan year for covered, in-network care. Once you hit it, the plan pays 100% of covered in-network costs for the rest of the year. For 2027, the federal ceiling is $12,000 per person / $24,000 per family — plans can set their maximum lower, never higher.

A worked illustration (not a real plan)

Everything below is made up to show the math. It is not a Tennessee plan, not a price quote, and not a recommendation.

The illustrative plan: $2,000 deductible · flat copay for primary care visits · 20% coinsurance after the deductible · $6,000 out-of-pocket maximum (below the 2027 federal ceiling).

Meet Jordan. Here's her year:

• February — primary care visit. She pays the flat copay. The deductible is untouched, because copays typically don't count toward it.
• May — outpatient procedure. The plan's allowed amount is $3,000. Jordan pays the first $2,000 (her deductible is now met), then 20% coinsurance on the remaining $1,000 — that's $200. Running total toward her out-of-pocket max: $2,200.
• October — surgery. The allowed amount is $30,000. Without a cap, 20% coinsurance would be $6,000 — but Jordan has already paid $2,200 toward her out-of-pocket maximum, so she pays $3,800 ($6,000 − $2,200). The plan covers the rest. She's now hit her $6,000 maximum: covered in-network care costs her nothing more for the rest of the year.

Three things the illustration leaves out, because plans vary: monthly premiums never counted toward any of these totals; out-of-network care may not count toward the maximum; and some plans have separate deductibles (for example, for prescriptions).

Cost-sharing reductions can shrink these numbers

If your income is between 100% and 250% of the federal poverty level and you enroll in a Silver plan, cost-sharing reductions lower your deductible, copays, coinsurance, and out-of-pocket maximum. Same plan, smaller numbers. Details: Subsidies in Tennessee for 2027.

Watch-outs

• Individual vs. family amounts. Family plans have both an individual and a family deductible and out-of-pocket maximum. One person's spending counts toward both their own limit and the family limit.
• Separate prescription deductibles. Some plans have a second deductible just for drugs. Check before you assume.
• The cap covers covered, in-network care. Services your plan doesn't cover, and usually out-of-network care, don't count toward the maximum.

Frequently asked questions

Do I have to meet my deductible before my plan pays anything? No. Copays generally apply from the first visit, and many plans cover certain services before the deductible. It depends on the service and the plan — check your plan's summary of benefits.

What's the difference between a copay and coinsurance? A copay is a flat fee (the same amount every time for that service). Coinsurance is a percentage of the cost, so the dollar amount changes with the bill.

Do my monthly premiums count toward my deductible or out-of-pocket maximum? No. Premiums are separate — they keep your coverage active but don't chip away at either number.

Do copays count toward my deductible? Typically no — but they usually do count toward your out-of-pocket maximum. Plan rules vary, so confirm with yours.

What happens after I hit my out-of-pocket maximum? Your plan pays 100% of covered, in-network care for the rest of the plan year. You still pay your monthly premium.

Can my plan's out-of-pocket maximum be higher than $12,000 per person? Not for 2027 — that's the federal ceiling ($24,000 for a family). Plans can set it lower, never higher.

Why did someone with the same plan pay less than me for similar care? Timing in the plan year matters (had they already met their deductible?), and so does network status, the specific services billed, and whether cost-sharing reductions apply to them. Same plan name doesn't always mean the same bill.

Is the plan with the lowest premium the most affordable? Often not. A low premium usually means a higher deductible. Compare total yearly cost (premiums plus the care you expect) and the worst case (premiums plus the out-of-pocket maximum). How to estimate it.

How does a family deductible work? Most marketplace family plans use an embedded deductible: each person has an individual deductible inside the family one, so one person's costs start being shared once they hit their own amount. Family deductibles explained.

What does "copay after deductible" mean? The copay only kicks in after you've met the deductible; before that you pay the full negotiated price. If the table says "deductible does not apply," you pay just the copay from the first visit. Reading the cost table.

Keep reading

• Lowering your costs: subsidies and cost-sharing reductions
• What plans cost in Tennessee
• Provider networks: HMO, PPO, EPO
• Prescription coverage: formularies and tiers
• How we verify our information
• Glossary

Sources

• HealthCare.gov — glossary and plan-cost explanations (deductible, copay, coinsurance, out-of-pocket maximum)
• Centers for Medicare & Medicaid Services (CMS) — 2027 federal out-of-pocket maximum ($12,000 individual / $24,000 family)

Every figure and claim on this site is checked against primary sources. See how we verify.