University of Washington Human Resources

Plan costs: premiums and deductibles

To choose the plan that’s best for you and your family, you have to know how much it costs. One mistake people make is to focus only on the premium without also considering other costs, such as the deductible.

How you pay for health insurance

Each month you pay the premium, which is automatically deducted from your paycheck. You pay this even when you don’t visit the doctor or otherwise use any health care services.

When you do visit the doctor, what you pay goes toward your annual deductible. Once you pay the entire cost of the deductible, your insurance begins paying for part of your health care costs. The part you pay takes the form of either coinsurance or copayments.

With coinsurance, the costs you pay for services are calculated as a percentage (for example, 20 percent). Insurance pays the remaining percentage of the cost. With copayments, on the other hand, you pay a fixed amount (for example, $20).

Generally, you’ll pay coinsurance after you visit the doctor when the bill arrives in the mail. Copayments are usually made at the doctor’s office when you get the service.

While plans using coinsurance are more common, some people prefer plans with copayments because costs are more predictable.

Once you begin paying coinsurance or copayments, the most you’ll have to pay during a year for covered services is the out-of-pocket limit. Most people don’t reach their out-of-pocket limit during a typical, healthy year. Both the out-of-pocket limit and the deductible reset at the beginning of each calendar year.

Compare plan costs

When comparing plans, make sure to consider both the premium and the deductible — the two tables below summarize costs based on individual or family coverage. For full details about the cost of a plan, including coinsurance and copayments for specific medical services and prescriptions, use the PEBB medical benefit comparison tool and review the plan coverage documents.