Premium, Deductible, Copay, Coinsurance and Out-of-Pocket Maximum Explained
What a premium, deductible, copay, coinsurance and out-of-pocket maximum mean, one year of bills traced through a plan, and the 2026 and 2027 federal limits.
Five numbers decide what a health plan costs you. The premium is the monthly price of keeping the plan, whether or not you use care. The deductible, copays and coinsurance are what you pay when you do get care, and the out-of-pocket maximum caps how much those three can add up to for covered, in-network care in one plan year.
This guide defines each one, follows twelve months of bills through a single plan, and lists the federal limits for plan years 2026 and 2027.
These are the numbers to line up side by side when you choose a plan for 2027. Open enrollment for 2027 health plans covers the dates and deadlines.
Key takeaways
- The premium pays for having coverage. It counts toward neither the deductible nor the out-of-pocket maximum.
- The deductible is the part of covered care you pay in full before the plan starts paying. Marketplace plans cover certain preventive services before you reach it.
- A copay is a set dollar amount per service. Coinsurance is a percentage of the plan's allowed amount, usually charged once the deductible is met.
- The out-of-pocket maximum limits what you pay in deductible, copays and coinsurance for covered in-network care. Once you reach it, the plan covers 100% of covered in-network costs until the plan year ends.
- The federal ceiling on out-of-pocket maximums is $12,000 for self-only coverage and $24,000 for family coverage in plan year 2027, up from $10,600 and $21,200 in plan year 2026.
Premium: the price of having coverage
The premium is your monthly bill for the plan itself. It is the same whether you see a doctor every week or never. Marketplace enrollees may get a premium tax credit that reduces it; how Marketplace premium tax credits work explains who qualifies for 2026 and 2027.
The premium stays separate from the other four terms. HealthCare.gov's definition of the out-of-pocket maximum names monthly premiums as one of the costs that do not count toward it, so a year in which you reach the maximum still includes twelve premium payments on top.
A low premium is therefore not the same as a low yearly cost. HealthCare.gov notes that deductibles, copays and coinsurance can sometimes add more to a year's spending than the premium itself. Comparing plans by total yearly cost shows how to weigh the two.
Deductible: what you pay before the plan shares costs
Until your spending on covered care reaches the deductible, you pay those bills yourself, at the plan's allowed amounts. Take an illustrative $2,000 deductible: the first $2,000 of covered services in the plan year is yours to pay. Once it is met, most covered services cost you only a copay or coinsurance, and the plan covers the remainder.
Some care is paid for before the deductible is met:
- Preventive care. Every Marketplace plan pays in full for a set list of preventive services, even when no deductible has been met yet. HealthCare.gov attaches two conditions: the no-cost rule generally applies when the provider is in the plan's network, and $0 is not guaranteed in every case. A visit can also include other care that is billed as usual alongside the preventive service.
- Services the plan pays for early. Many plans start paying for selected services, a routine checkup for example, while the deductible is still unmet. The plan details list which services these are.
Some plans also set a separate deductible for particular services, prescription drugs being one example.
Family deductibles
Family coverage often comes with two deductibles at once: one for each person and one for the household as a whole. Check your plan documents for both amounts and for how one family member's spending counts toward each.
Copay and coinsurance: how each bill is split
Once a covered service is past any deductible, your share usually takes one of two forms. The dollar figures below are illustrative.
- Copayment (copay): a set dollar amount per service, such as $35 for a visit, whatever the visit costs the plan. Some plans charge only the copay from the first visit of the year. In others the copay applies only after the deductible is met, and until then you pay the visit's full allowed amount.
- Coinsurance: your percentage share of a covered service's allowed amount, normally charged once the deductible is met. With 30% coinsurance and a $400 allowed amount, you pay $120 after the deductible and the plan pays $280. Before the deductible is met, the whole $400 is yours.
The allowed amount sets the price
Both are calculated on the allowed amount: the most the plan will pay for a covered service, sometimes labeled the eligible expense, payment allowance or negotiated rate. A provider who charges more than that figure may send you a bill for the gap, which is known as balance billing. A provider in the plan's network (a preferred provider) is not allowed to send you a balance bill for covered care. That is one reason out-of-network care can cost much more than the coinsurance rate suggests, as the guide to HMO, PPO, EPO and POS network types explains.
Out-of-pocket maximum: the ceiling on a bad year
The out-of-pocket maximum caps what you pay for covered services in one plan year. Once your deductible, copays and coinsurance for in-network care add up to it, the plan pays the full cost of covered benefits until the plan year ends.
HealthCare.gov names four kinds of spending that do not count toward it: monthly premiums, money spent on services the plan does not cover, out-of-network care, and any amount a provider charges above the allowed amount.
Federal limits for 2026 and 2027
Marketplace plans, and other individual and job-based plans that are not grandfathered (a status some older plans keep), must keep their out-of-pocket maximums at or below a federal limit that the Department of Health and Human Services (HHS) publishes each year. The figures below are ceilings, not typical amounts. A plan may set a lower maximum, and Silver plans with cost-sharing reductions, the extra savings for lower-income Marketplace enrollees who qualify, are required to.
| Plan year and plan | Self-only coverage | Family coverage |
|---|---|---|
| 2026, standard limit | $10,600 | $21,200 |
| 2027, standard limit | $12,000 | $24,000 |
| 2027, Silver with cost-sharing reductions, household income 100% to 200% of the poverty line | $4,000 | $8,000 |
| 2027, Silver with cost-sharing reductions, household income above 200% up to 250% | $9,600 | $19,200 |
CMS puts the 2027 standard limit about 13.2% above the 2026 limit, so plans can set higher maximums for 2027 than they could for 2026.
Each person on a family plan has an individual cap
On coverage that is not grandfathered, the self-only limit also applies to each person within a family plan. In plan year 2027, that means no single family member pays more than $12,000 in cost sharing for covered in-network care, even though the family as a whole can reach $24,000. HHS set out this rule for plan years starting in 2016, and in May 2015 guidance the Departments of Labor, Health and Human Services and the Treasury applied it to job-based plans from those plan years onward.
One year of bills, followed through one plan
Here is how the five terms interact over twelve months.
Example: The plan, the person and the bills here are illustrative. A single adult enrolls in a 2027 plan with a $420 monthly premium after any tax credit, a $3,000 deductible, 20% coinsurance after the deductible, a $30 copay for primary care visits that applies even before the deductible, and an $8,000 out-of-pocket maximum. That maximum is below the 2027 federal limit of $12,000 for self-only coverage. In this plan, copays count toward the out-of-pocket maximum but not toward the deductible; plans differ on this point. All care is in network, and the cost of each service in the table is the plan's allowed amount.
| When | Care | Allowed amount | You pay | Plan pays | Your total so far |
|---|---|---|---|---|---|
| January | Preventive checkup | $250 | $0 | $250 | $0 |
| March | Sick visit, primary care | $120 | $30 copay | $90 | $30 |
| April | MRI | $1,500 | $1,500 | $0 | $1,530 |
| June | Outpatient knee surgery | $18,000 | $4,800 | $13,200 | $6,330 |
| August to October | 12 physical therapy sessions | $1,800 | $360 | $1,440 | $6,690 |
| November | Two-day hospital stay | $25,000 | $1,310 | $23,690 | $8,000 |
| December | Follow-up specialist visit | $200 | $0 | $200 | $8,000 |
Read it line by line:
- January: the checkup is preventive care, so it costs nothing and the deductible is untouched.
- March: the $30 copay applies before the deductible. It counts toward the $8,000 maximum, but the full $3,000 deductible is still unmet.
- April: the MRI falls entirely under the deductible, so the enrollee pays all $1,500. Half the deductible is now met.
- June: the first $1,500 of the surgery finishes the deductible. Coinsurance of 20% applies to the remaining $16,500, which is $3,300. The bill comes to $4,800.
- August to October: 20% of $1,800 is $360.
- November: 20% of the $25,000 stay would be $5,000, but only $1,310 is left before the $8,000 maximum. The plan pays everything above that.
- December: the maximum has been reached, so the plan pays 100% of covered in-network care until the plan year ends.
Over the year, covered care cost $46,870 at allowed prices. The enrollee paid $8,000 of it and the plan paid $38,870. Add $5,040 in premiums ($420 times 12) and the year cost $13,040 in total. In a quiet year with only the checkup and the March visit, the same plan would have cost $5,070: the premiums plus one $30 copay.
Out-of-network care, services the plan does not cover and bills above the allowed amount could have pushed the total higher, because none of them counts toward the maximum.
Which costs count toward which limit
| Cost | Counts toward the deductible? | Counts toward the out-of-pocket maximum? |
|---|---|---|
| Monthly premium | No | No |
| What you pay for covered in-network care before the deductible is met | Yes | Yes |
| Copays for covered in-network care | Depends on the plan | Yes |
| Coinsurance for covered in-network care | Usually not; it usually starts after the deductible | Yes |
| Out-of-network care | Depends on the plan | No |
| Services the plan does not cover | No | No |
| Charges above the allowed amount | No | No |
Emergency care can be an exception to the out-of-network row, because federal surprise-billing rules set special terms for it. The guide to what the No Surprises Act protects you from explains them.
After each claim, your plan sends an Explanation of Benefits that lists the allowed amount, what the plan paid and what you may owe, so you can add up how close you are to the deductible and the maximum. How to read an Explanation of Benefits walks through each field.
Frequently asked questions
Does the premium count toward the deductible?
No. The premium is the price of keeping coverage, while the deductible tracks spending on covered care. HealthCare.gov also lists premiums among the costs that do not count toward the out-of-pocket maximum.
Do copays count toward the deductible?
That depends on the plan. Copays for covered in-network care do count toward the out-of-pocket maximum. Whether they also reduce the deductible is a plan design choice, so check the plan's documents rather than assume either way.
What happens after you reach the out-of-pocket maximum?
The plan pays 100% of the cost of covered in-network services for the rest of the plan year. Premiums are still due each month, and you can still owe for out-of-network care, services the plan does not cover and charges above the allowed amount.
Can a plan's out-of-pocket maximum be lower than the federal limit?
Yes. The federal figure is a ceiling: $12,000 for self-only coverage in plan year 2027. Plans can set a lower maximum, and Silver plans with cost-sharing reductions must. For 2027 their self-only maximum can be no more than $4,000 or $9,600, depending on household income.
Is coinsurance a percentage of the provider's bill?
It is a percentage of the plan's allowed amount, not of whatever the provider charges. A provider in the plan's network may not bill you above the allowed amount for covered services. A provider outside the network may bill you for the difference between its charge and the allowed amount, on top of your coinsurance.
Sources
- Your total costs for health care: Premium, deductible & out-of-pocket costs (HealthCare.gov)
- Deductible (HealthCare.gov)
- Coinsurance (HealthCare.gov)
- Out-of-pocket maximum/limit (HealthCare.gov)
- Allowed amount (HealthCare.gov)
- Preventive health services (HealthCare.gov)
- Premium Adjustment Percentage, Maximum Annual Limitation on Cost Sharing, Reduced Maximum Annual Limitation on Cost Sharing, and Required Contribution Percentage for the 2027 Benefit Year (Centers for Medicare & Medicaid Services, January 29, 2026)
- FAQs About Affordable Care Act Implementation (Part XXVII) (U.S. Department of Labor, May 26, 2015)