How Does Health Insurance Work? Deductible vs Out-of-Pocket Maximum, Copay vs Coinsurance

Dongni Chen is a licensed health insurance agent who speaks Mandarin and Cantonese, and can help you compare plans and enroll in Chinese. Health insurance in the United States is more complicated than simply paying a fixed percentage of every medical bill: four main numbers matter—your premium, deductible, copay or coinsurance, and out-of-pocket maximum.

Information compiled in October 2026. If policies change, follow the official announcements.

By Dongni Chen, licensed insurance agent, NPN 20635222 · RedNote (Xiaohongshu): 咚咚在美国 · Updated October 25, 2026

Key points

Health insurance in the United States does not simply pay a fixed percentage of each bill. The 4 main numbers are your premium, deductible, copay or coinsurance, and out-of-pocket maximum.
The deductible is what you pay yourself before insurance starts sharing the cost.
The out-of-pocket maximum is the most you pay yourself in a year. After you reach it, the insurer pays 100% for covered in-network services.
For 2027, ACA plans cannot have an out-of-pocket maximum above $12,000 per person or $24,000 per family.

1. Start with these terms

Chinese term	English term	Meaning
保费	Premium	What you pay the insurer every month, whether or not you get medical care
自付额 (also 起付线 or 免赔额)	Deductible	What you pay yourself each year before insurance starts sharing the cost
共付	Copay	A fixed amount you pay for a visit or prescription, such as $40 for a doctor visit
共保	Coinsurance	The percentage you pay, such as 20%, while the insurer pays 80%
自付上限	Out-of-Pocket Maximum	The most you pay yourself in a year, counting deductibles, copays and coinsurance
网络内 / 网络外	In-network / Out-of-network	Doctors and hospitals with a contract with the insurer are in-network, with lower prices

Monthly premiums do not count toward the out-of-pocket maximum.

2. A step-by-step example

Suppose someone buys a plan with these terms (the numbers are for illustration only):

Deductible: $5,000.
Coinsurance after the deductible: 20%.
Primary care visit: $40 copay. This plan does not require meeting the deductible first for primary care visits.
Out-of-pocket maximum: $9,000.

Step 1: A primary care visit

They see their primary care doctor for a cold and pay just the $40 copay.

Step 2: Tests

The doctor orders tests costing $1,200 at the insurer's negotiated price. They have not met the deductible, so they pay the full $1,200. → They have now paid $1,200 toward this year's deductible, with $3,800 left.

Step 3: Surgery in the hospital

Later, they have surgery in the hospital. The bill is $40,000 at the insurer's negotiated price.

First, they pay the remaining deductible: $3,800.
Of the remaining $36,200, they pay 20%, or $7,240, and the insurer pays 80%.

But that would bring their total for the year to $40 + $1,200 + $3,800 + $7,240 = $12,280, more than the $9,000 out-of-pocket maximum.

So they pay no more than $9,000 in total, and the insurer pays the amount above that.

Step 4: The rest of the year

They have reached the out-of-pocket maximum. For the rest of the year, the insurer pays 100% for covered in-network services. They no longer pay deductibles, copays or coinsurance, but still pay the monthly premium.

On January 1 of the following year, the deductible and out-of-pocket maximum start over from 0.

3. What does the insurer's payment percentage mean?

ACA plans have four tiers. The often-mentioned 60%, 70%, 80% and 90% figures describe the insurer's average share of costs:

Tier	Insurer's average share	Your average share
Bronze	60%	40%
Silver	70%	30%
Gold	80%	20%
Platinum	90%	10%

These are averages across a standard population, not the percentage paid for each visit. What you actually pay depends on whether that service has a copay, coinsurance or costs that still count toward your deductible.

People with income below 250% of the poverty level who choose Silver can get Cost-Sharing Reductions. The insurer's average share increases to 73%, 87% or 94%.

4. Common points of confusion

Preventive care usually has no charge: Annual checkups, many vaccines and some screenings, such as mammograms and colorectal cancer screening, generally cost nothing in-network, even before the deductible. But if a doctor finds a problem and orders more tests, those may have a charge.
Not every service requires meeting the deductible first: Many plans charge only a copay for primary care visits and common medicines. Plans differ; read the Summary of Benefits and Coverage.
Out-of-network care may not be covered, or may have less coverage: HMO and EPO plans generally cover only in-network care, except emergencies. Out-of-network costs may not count toward your out-of-pocket maximum, and the hospital may also bill you for the difference.
Emergency care has protections: Under the federal No Surprises Act, your share of emergency care costs is generally calculated at in-network rates even at an out-of-network hospital.
Out-of-pocket maximums in family plans: Once a family member reaches the individual out-of-pocket maximum, they generally do not have to keep paying. They do not need to wait for the family total to reach the family maximum.
The out-of-pocket limit rises in 2027: The maximum allowed for ACA plans rises from $10,600 per person / $21,200 per family in 2026 to $12,000 per person / $24,000 per family in 2027. A particular plan may have lower limits; check the plan details.

5. What should you compare when choosing a plan?

If you rarely need care: Focus on monthly premiums, but also check how much you could pay under the out-of-pocket maximum if you develop a major illness.
If you often need care or take long-term medicines: Look closely at deductibles, copays and drug tiers. A plan with a higher monthly premium does not necessarily cost more overall.
If you have regular doctors or hospitals: Confirm that they are in the plan's network first.
If you are planning childbirth or surgery: Add expected medical costs to a year's premiums to compare total costs.

If you are unsure how to work it out, contact me and I can help you compare.

Main sources: HHS Notice of Benefit and Payment Parameters for 2027 (out-of-pocket limits); HealthCare.gov.

Call (213) 322-8909Email