--- title: Deductible, Copay, Coinsurance, Out-of-Pocket Max: How They Fit Together url: https://www.tnhealthcoverageexplained.org/using-your-plan/costs-explained description: Deductible, copay, coinsurance, and out-of-pocket maximum explained in plain English — with a worked example of how a year of care adds up under a 2027 plan. last_verified: 2026-10-17 publisher: TN Health Coverage Explained (independent; does not sell insurance) --- # 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](https://www.tnhealthcoverageexplained.org/costs/subsidies). ## 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](https://www.tnhealthcoverageexplained.org/using-your-plan/reading-your-plan#how-to-estimate-a-plans-total-yearly-cost). **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](https://www.tnhealthcoverageexplained.org/using-your-plan/reading-your-plan#individual-vs-family-deductibles). **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](https://www.tnhealthcoverageexplained.org/using-your-plan/reading-your-plan). ## Keep reading - [Lowering your costs: subsidies and cost-sharing reductions](https://www.tnhealthcoverageexplained.org/costs/subsidies) - [What plans cost in Tennessee](https://www.tnhealthcoverageexplained.org/costs) - [Provider networks: HMO, PPO, EPO](https://www.tnhealthcoverageexplained.org/using-your-plan/networks) - [Prescription coverage: formularies and tiers](https://www.tnhealthcoverageexplained.org/using-your-plan/prescriptions) - [How we verify our information](https://www.tnhealthcoverageexplained.org/how-we-verify) - [Glossary](https://www.tnhealthcoverageexplained.org/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](https://www.tnhealthcoverageexplained.org/how-we-verify).