What is the difference between a premium, a deductible, a coinsurance, a co-pay and an out of pocket maximum?

A Premium is the monthly, or annual cost you pay your insurance provider to be enrolled in an insurance plan. Think of your premium payment as your monthly or annual subscription cost in order to have active insurance coverage. Many patients will have their premium costs automatically deducted from their pay stubs if receiving insurance from an employer.

A Deductible is a specific dollar amount, which typically resets on January 1st each year, that is the patient’s responsibility to pay towards their healthcare costs before the insurance plan takes effect. Deductible amounts and what type of services they apply to vary across insurance plans. Some insurance plans have a $0 annual deductible for mental health services, while others have a deductible anywhere from $500 to $5000 depending on the type of plan the patient selected.

A Coinsurance is a percentage of the cost of an appointment which applies once a deductible has been met OR if no deductible applies. This means the cost per appointment may vary depending on the length of time and the services provided on a given appointment date. Coinsurance percentages also vary widely from 10-50%, depending on the insurance plan’s benefits.

A Co-pay is a set and defined cost, typically between $10-$50 for mental health services that a patient pays for each appointment in a calendar year. A co-pay will not change in price, regardless of the duration of the appointment or the services provided, as long as those services are covered under the insurance plan’s benefits.

Some insurance plans include a coinsurance AND a copay for each appointment, while other plans will have either a coinsurance or co-pay exclusively, depending on the benefits of the plan.

The Out of Pocket (OOP) is the total amount of charges a patient is required to pay annually towards their healthcare costs. This amount is inclusive of the plan’s deductible, coinsurance and co-pay payments within a calendar year.