How Health Insurance Works | What is a Deductible? Coinsurance? Copay? Premium?

If you have health insurance or are in the market for an insurance plan, you may be feeling terminology overload. What is a deductible? What is coinsurance? How does a Co-pay work? What is an insurance Premium? Individual out of pocket maximum? In this video, we’re going to break down these essential health insurance terms, explain how the costs work for both you and your insurance company, and hopefully help you feel more confident about how your plan works.
Table of Contents:
=============================
0:00 - Intro
0:30 - Overview
1:01 - Your Expenses
1:28 - Insuranace Premium
1:43 - What is a Deductible?
3:13 - What is Copay?
3:50 - FREE Services
4:03 - What is Coinsurance?
4:40 - Individual Out of Pocket Maximum (OOP)
5:00 - Family OOP Max
5:08 - Review
There are 3 levels of health care costs. The higher your costs for the year, the higher up you go. Level 1, You’re paying everything. When your healthcare expenses get to a certain point, you enter Level 2, where you and your insurance company share the costs. If the money you’re paying out of your pocket hits your plan’s cap, you enter Level 3, where your insurance will cover everything further. We’ll circle back to this at the end and it’ll all make more sense.
Now, whether your health insurance is provided through your employer plan, by someone else’s employer plan, self-pay, or a government-issued plan like Medicare or Medicaid, they all have set amounts for premiums, deductibles, co-pay, and co-insurance. These are all terms that represent your out of pocket costs.
🔵 Premium. Think of your Premium like a monthly subscription fee. This is how much you pay each month to keep your insurance active. You pay this even if you never go to a doctor.
🔵 Deductible. Your deductible is an amount specified by your plan that you have to pay in a given year before your insurance pays a dime. For example, if your deductible is set at $4000, and the bill for your visit to the hospital was $2000, you have to pay 100% of that bill. Bummer.
But if your deductible is set at $4000 and the hospital bill is $8000, insurance would kick in to help cover half of that bill. Notice that I said it will “help cover” half of that bill…”help.” More on that later. Once you have paid that amount toward covered medical expenses, you’re good until your plan renews. (Usually January 1st)
🔵 Co-Pay. Your co-pay is a set cost you pay for a covered health care service, such as visiting an in-network doctor, a specialist, or buying drugs. Let’s say you go to see your doctor, who charges $250 for an office visit, but your insurance has a co-pay of $50 for doctor’s visits. You pay the $50 and your insurance picks up the rest.
🔵 Co-Insurance. Remember when I said that insurance will “help cover” costs that exceed your deductible? That’s where co-insurance comes in. Co-insurance is a shared cost between you and the insurance company. So, depending on your policy, it may say that after your deductible you pay 20% and your insurance company pays 80%. That’s called an 80/20 policy.
🔵 Individual Out of Pocket (OOP) Maximum: The amount of money that you pay through co-pays, co-insurance, and deductibles. This is your plan’s cap on how much you have to personally pay toward your healthcare costs. After that, 100% is covered by your insurance.
🔵 Family out of pocket max: A cap on the medical costs for a family. After that, your insurance covers the rest for the entire family.
Now let’s bring back the 3 levels example from the beginning. You start on level 1, paying basically everything out of pocket…that is until you reach your deductible. That’s when you go to level 2, where you split the cost with your insurance company through Co-Insurance. If your medical expenses get so high that the total of what you paid reaches your yearly out of pocket maximum, you move to level 3 where all further healthcare expenses for the rest of the year are 100% covered by your insurance plan. When your plan resets for the year, you start back at the beginning.

[@ShpitzGaming]

I know all the other comments say this... but thank you, this is THE BEST explanation for health insurance I have come across and I have just watched like 50 videos. I was tyring to become a pharmacy technician so I wanted that understanding and you nailed it on the head, I completely understand now... THANKS AGAIN!!!

[@EnsembleHealthPartners]

So happy to hear you found it helpful! Thanks for letting us know. 😀

[@noemyluque7794]

Yes agreed! This helped so much!

[@AceofDlamonds]

Agreed thank you for this vid. Very easy to understand and write down notes. I want to know as much as I can about every policy or situation from now on. Before it seemed a bit like a foreign language.

[@lewisjoel7682]

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[@leshommesdupilly]

Hey, you can also watch Dr Glaucomflecken's videos ! Very instructive, and very funny And this month, he is doing a series of daily short videos about health insurances

[@OMIGHTY1]

Insurance companies struggle to convey this information; here, it was done in 6 minutes. Kudos to you.

[@vdhg_Ant]

Thanks for breaking the terminology down. Not only is US healthcare a criminal system, but it's insult to injury when they don't even cover this type of info in public school systems.

[@adrielmarcano306]

and a criminal system when I just noticed my deductibles are set so high. Now I understand every year will be as If I didn't have any healthcare coverage. I only go to the doctor yearly for minor things. Therefore, I'll be paying for my bills out of pocket. Then January 1st will be reset again. Also, the coinsurance and copays % may never kick in either yearly until something catastrophic happens (may God forbid)...... That's a crime for us to pay monthly for years after years to only have coverage for something extraordinary that may never happen and we don't want it to happen either. My deductible is 7,000. I never exceed it yearly.

[@vdhg_Ant]

@adrielmarcano306 wow, that is a lot.

[@celiastarot]

WELL SAID!!!!!

[@christopherharv]

Imagine a community so cold that their ethic is "oh, you're on the verge of dying? We'll help you... for tens of thousands of dollars!"

[@doriancroatia2054]

When my mother had pancreas attack back in 2007 , she was in a hospital for three months, they did very serious surgery successfully and didn't even asked her for insurance card, which she lost accidentally. (Croatia).

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This should be KZbin top recommendation that comes up for this type of video.

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We're moving up the rankings slowly but surely. :)

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Please they should use this guy to explain many more things in life

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Dating is next

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I agree 😅

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[@louisjones808]

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[@jaredepstein5478]

Perfect explanation. I can finally understand what has bewildered me for far too long. Thank you for your helpful contribution to the world!

[@AHGChicagoIL]

Best explanation I have ever heard. Thank-you!

[@aanchal5844]

this was the most helpful video ever! thank you :)

[@ethanperez6007]

Thank you so much you are the best explainer ever!! *watching from my job*

[@telsamorgan5369]

Your videos are very useful and provide lots of information. I have received lots of help from them, please continue to share this kind of information. Thank you.

[@hishamsultan1195]

What a fantastic video. Great explanation. God bless you, man.

[@asunnydisposition9180]

This is a very comprehensive and well put-together video. Thank you so much!

[@aaronmirtesfilm]

This is the best explanation video I’ve seen yet!! Thank you!

[@EnsembleHealthPartners]

Thanks Aaron. So happy you found it helpful! 🙂

[@millinniul]

This 6 minute video just taught me so much. Thank you

[@dayaanmazhar2555]

I was not fully able to understand these terms after hours of research but this video just made everything clear and now I totally understand these terms so thank you!

[@shineabello3705]

This is very helpful, thank you.

[@hyderabadhero007]

smooth - simple - nice explanation

[@Stratos-vh6wi]

Thanks, you really helped explain health insurance to me!!!

[@ahsansubhan6]

Amazing video. Thank you so much that actually helped alot!

[@EnsembleHealthPartners]

So glad you thought so! :)

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Wow!!! This was THE BEST explanation!!!!!

[@user-io3vs7fz5j]

What a brilliant video. Great advice, simple and practical. I like your video presentation. It is informative too, at the same time. Thanks a lot for your guidance!

[@karimzakaria9621]

Dude thanks a lot. Just got my first job out of college and yeah I have a lot of learning to do.

[@vivaksingh2319]

This is the best explanation video I’ve seen yet!! Thank you !KZbin top recommendation that comes up for this type of video

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[@fear_less_2020]

Thank you SO MUCH man!! I just joined a new company and I have to compare insurance plans and all these terms were new to me until you explained it so well. God bless you!

[@laurab6311]

OMG thank you so much! You just made my life easier.

[@accessiblebits]

Thanks for making sense of all of this, thanks a lot

[@mixtecjaguar9824]

What a dance! So many strings and levers to honk/pull/move... Thank you for the clarification.

[@TheNursePhotographer]

That was easy to understand. Thank you!

[@user-jf4km8lm3d]

This video is super helpful!!! Tnx a lot!

[@kendallcalvin1057]

Perfect video. Thank you!

[@The.Jedi.Wizard]

Great explenation. Thanks!

[@abhishekrajeev1028]

amazingly explained !!

[@Olakinniyi]

Insightful video! Thanks

[@deenichols3211]

Thanks again for posting this :) btw love the beard

[@adrianamunoz9809]

Explained very well!!

[@DetroitGoldie]

Wow! Finally! Someone who could truly break it down! Thanks!

[@Zoeprincess1804]

Very well explained Ty ❤

[@danielcordova4725]

Thanks this helps a lot. I got my first job that gives me health insurance so it was a bit confusing.

[@user-lk1hv8mt9y]

I am learning so much from watching your videos. Thank you so much for sharing this amazing source of information. This one is quite helpful.

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Thank you , a better more understandable explanation of Dreadful Health insurance.

[@AhmedKhashabaa]

very easy and straight forward , thanks for explaning

[@leshommesdupilly]

Lol

[@lumalion-uas785]

Good sharing, thanks

[@cdragon88]

thank you, thank you, thank you., Explained for all people to understand. I can't thank you enough. Thumbs up and subscribed.

[@marccoley]

Great Video, I will be including the link to this video in my training for my community.

[@EnsembleHealthPartners]

That's awesome! Hope it helps folks get a handle on all this. Thanks for letting us know. 😁

[@rgv9841]

Very informative! Thank you!

[@EnsembleHealthPartners]

Glad it was helpful! 😀

[@vocabularymillionaire]

This bloke knows his subject matter.

[@ms-life-media9080]

Thanks brother for your sharing 👍

[@alexdelacruz4677]

Thank you for the explanation. Only in America we have to go through this non-sense.

[@JoseSanchez0795]

Amazing video 😊!

[@dunker888]

Video definitely helped thanks

[@farrukhahmedsid]

Wow Thats easy to get.. thanks to you.

[@loganforster6802]

Best video. thanks

[@RootsofAbundace]

BIG HELP!!! Thanks

[@amihanruiz5143]

Oh my god. This explained the terms so well, that I just got sadder that healthcare has this many hoops in the US. That aside, thank you for this video. I'm blessed having to review this because I'm looking forward to my first benefitted job. Best of luck to all the job and healthcare journeys on here!

[@takashi05mauder77]

actually good explanations

[@EnsembleHealthPartners]

Thanks for the feedback. 🙂

[@srq_swamprat9894]

Good video! thanks

[@DreadHeadShawdie3]

Perfect. Thanks.

[@tushargarud5098]

Thanks for such an easy explanation for the complex insurance terms.

[@DestinyMaatHotepDaniels]

Super helpful info

[@jaymiekay9126]

…..how do I say this. THANK YOU!!!! …literally. I’m saving this to my favorites because I don’t even know how to else to thank you for this explanation. I wish this video had ads because you deserve to be paid for this explanation. Guess I’ll just like and subscribe instead lol. But seriously. THANK. YOU.

[@EnsembleHealthPartners]

Thank YOU for this amazing feedback. :)

[@christiemcpeters3604]

Nice video!

[@RanaPilgrim-ne6yq]

Informative

[@brandonbunting4533]

Great video!

[@EnsembleHealthPartners]

Glad you enjoyed it!

[@Hummingbird25]

Very helpful

[@christinapatino3769]

This is so thorough and explained so simply. Thank you

[@qingyizhang2329]

Thank you so much sir

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Thank you so much!!

[@victorgudiel5896]

Thank YOU!!

[@user-ne1nk6yo4q]

very informative video. helped me alot. keep it up.

[@2FINE4YOUBABYGIRL]

Thank you for explaining it. Sadly I am in the only developed country in the world that needs this info

[@vinceescobedo6847]

Thank you!

[@user-zz9rd5rj4v]

good to listen

[@noeldarvassy2771]

As noted below, this is BY FAR the clearest explanation of this terminology and how the different items interact. Thank you

[@ThaoTrangPhotography]

Thank you so much for a simple explanation!

[@user-eg7fj4fb7k]

Great knowledge

[@zouzou8324]

THANK YOU🙏

[@user-dw9uc8qr4w]

very detail information

[@EliWanket]

Probably the most simplified and well-communicated breakdown of all this lingo. Thanks so much.

[@JeanYvesMinet]

Hands down the BEST video to explain the absurd complexity of US Healthcare plans and jargon. Thanks

[@user-pt4kx6yu6d]

thanks for expanation of coinsurance

[@gx0sty68]

I am a dutch student and I'm writing a final project on healthcare in the US. This single video helped me understand something I had previously been trying to figure out for 6 months! thank you so much!!

[@theredalpha7290]

Haha you are lucky. At this rate, as an American I want to move to Europe. Or Canada.

[@akashreddy6894]

Jesus! Great video. 🎉

[@sunzofman940]

Thank you, I was stuck on stupid when trying to understand all of this on my own.

[@ChristopherPenaranda]

Best Break Down for health insurance. Thank you so much, really insightful and needs to be shared!!

[@DanLau555]

Absolutely enlightening video on 'How Health Insurance Works'! 🌐💡 The breakdown of terms like deductible, coinsurance, copay, and premium makes navigating health insurance seem less daunting. Kudos for simplifying complex concepts! 🙌🏥 #HealthInsuranceExplained #FinancialWellness

[@artincorona]

Great video. My deductible says N/A. Is that the same as saying the deductible is zero?

[@jacobcordell2882]

Thank you so much it's sad that schools don't teach this

[@wineycartwright9257]

They worry to much about being Woke!

[@dianasequeira9332]

Very good explanation with examples. I have a question. Does Co-pay kick in, only after we have met our deductible?

[@EnsembleHealthPartners]

Thanks for the feedback. As for your question, unfortunately, this varies by plan, so you'll need to ask your provider.

[@mkhamis4140]

Thanks so much

[@_d4r1o_22]

Made me feel like I have a pHd.I finally understand some of this lol

[@paullast5686]

Best video

[@EnsembleHealthPartners]

We appreciate it, Paul. 🙂

[@ameliabelle5949]

This video contains a lot of information and is also very accurate. Thanks to you for sharing knowledge with us.

[@incontroversyistherekindne6683]

Thank you so much for this very helpful video. In the emergency visit example. Let’s say it cost $10,000 rather than $8,000. If my Individual OOP Max was $6,000 then I’d still only pay $6,000 right? If the bill was $100,000 I’d only pay $6000 right? What about drugs? What if I had to take a drug that cost $100,000? I’d only have to pay $6000 right? Thank you so much.

[@Matthew_Klepadlo]

A way to explain healthcare without being politically polarizing… What a fantastic video!

[@EnsembleHealthPartners]

Awesome! Thanks for the feedback Matthew.

[@shabbirnasir]

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[@anniewilliams4251]

I always wait for your videos as they are so informative and effective. Thank you for always sharing the correct information. Keep posting.

[@srikarmech]

Thank you for this video. It has helped ease the terminologies and the concepts, which is very helpful to make decisions.

[@IgnacioFlores.]

I live in Europe, i watch this video when I'm sad, it always lifts me up.

[@tetocaloscojones8229]

There is co-pay before reaching/paying full deductible amount ? or the co-pay kicks in after paying the deductible ? Would be the same co-pay as co-insurance if both stops after reaching the max OOP ? so confusing