Jesse Smedley is a Principal of Oakbridge Insurance and the founder of iHealthBrokers. He founded iHealthBrokers in 2007, and Oakbridge acquired iHealthBrokers in 2025. He has spent nearly two decades teaching people how to save money on their health insurance and navigate Medicare, and he is the author of Medicare A to Z: Your Roadmap to Medicare.
Two health plans can have very similar monthly premiums and still leave you with very different costs once you use them. One may not include your doctor. One may put your prescription in a higher tier. Another may cost more each month but save you money if you need a lot of care.
Here’s how to tell the difference: where you can get coverage, the terms that drive your costs, how networks and metal tiers work, and six questions to ask before you pick a plan.
Types of Health Insurance Coverage
Employer-Sponsored Coverage
If your insurance comes through your job, that’s employer-sponsored group coverage. Learn more about how it works on our group health insurance page.
If you leave your job or are laid off, you may be eligible for COBRA, which lets you keep the exact same group plan for a limited time. The main drawback is cost. With COBRA, you pay the full monthly premium yourself (plus a small administrative fee), so it’s usually very expensive.
Marketplace Plans
If you can’t get coverage through an employer, or you’re self-employed, your next most likely option is a marketplace plan. You’ll find these on HealthCare.gov or your state’s own marketplace. If you’re not sure which one your state uses, HealthCare.gov will redirect you. Our Affordable Care Act guide covers the basics.
Medicaid and CHIP
If your income is lower, you may qualify for Medicaid, or your children may qualify for CHIP, the Children’s Health Insurance Program.
Medicare
Most people become eligible for Medicare at 65 (some qualify earlier because of a disability). From there, you can choose Original Medicare or a Medicare Advantage plan.
Private Insurance Outside the Marketplace
You can also buy coverage directly through a broker or agent. Some of these plans follow different rules than marketplace plans.
There are pros and cons. Some plans offer more flexibility, such as nationwide PPO access. But plans that aren’t ACA-compliant, like short-term plans, may use medical underwriting, which means your health history can affect whether you’re approved and what you pay. See your options in our individual and family health plan guide.
The Most Common Health Insurance Terms
No matter which route you take, a few terms decide what you’ll actually pay. For a longer list, see A Complete Guide to Health Insurance Terminology.
1. Premium
Your premium is what you pay, usually monthly, to keep your coverage active. It’s the easiest number to understand and the easiest to compare.
2. Deductible
The deductible is what you pay out of pocket before your plan starts sharing the cost.
Deductibles are harder to compare than premiums because many plans cover some services before you meet the deductible. Those are usually more basic services, like preventive care. For something like a hospital stay, you’ll probably need to meet your deductible first. Plans may also have separate individual and family deductibles.
3. Copay
Once you’ve met your deductible, your plan shares costs in one of two ways: a copay or coinsurance.
A copay is a fixed dollar amount, and it’s often printed on your insurance card. For example, a plan might charge $25 for a doctor visit, $50 for a specialist and $150 for the ER.
4. Coinsurance
Coinsurance is a percentage of the bill instead of a fixed amount, which makes it harder to predict. With Medicare Part B, for example, your coinsurance is 20%. But 20% of what?
With a copay, you know the cost up front. With coinsurance, you may have to wait for an estimate or the bill.
5. Out-of-Pocket Maximum
The out-of-pocket maximum is your yearly limit on spending for covered care. Your plan tracks what you spend on deductibles, copays and coinsurance. Once you hit the limit, the plan pays 100% of covered, in-network services for the rest of the plan year.
Keep in mind that premiums don’t count toward your out-of-pocket maximum.
How the Math Works
Say your plan has a $2,000 deductible, an $8,000 out-of-pocket maximum and 20% coinsurance, and you need a surgery that costs $10,000.
First, you pay the $2,000 deductible. That leaves $8,000, and you pay 20% of it, which is $1,600. Your total is $3,600.
If you keep needing care that year and reach your out-of-pocket maximum, your plan picks up the rest of your covered costs.
A low monthly premium saves you money up front, but it doesn’t account for what you’ll pay when you use your coverage, fill prescriptions or need an unexpected procedure.
Understanding Health Insurance Networks
The numbers are the easier part. Just as important is the network, which decides how easily you can get care.
A plan can look great on paper, but if it doesn’t include the hospitals, specialists or doctors you need, it can cost you much more in the long run. Most plans fall into one of three types, each with a different level of flexibility. Learn more in EPO, HMO or PPO? What’s the Difference?
HMO Plans
An HMO is usually the most restrictive. You need to stay in network except in a true emergency, and you typically need a referral from your primary doctor to see a specialist.
PPO Plans
A PPO is at the other end. You can go in or out of network, though in network costs much less, and you usually don’t need a referral to see a specialist.
EPO Plans
An EPO sits in between. Like an HMO, it generally covers only in-network care except in emergencies, but like a PPO, it usually doesn’t require referrals.
How much flexibility do you need? Your plan documents spell out the exact rules, so use these labels as a starting point.
Understanding Marketplace Metal Tiers
Marketplace plans are grouped into four metal tiers: bronze, silver, gold and platinum. The tier says nothing about quality, networks or which doctors you can see. It only describes how costs are split between you and the plan.
Is platinum the best and bronze the worst? Not at all. The right tier depends on your needs.
Each tier is based on the share of total costs the plan pays for an average person:
- Bronze: the plan pays about 60%, you pay about 40%
- Silver: about 70/30
- Gold: about 80/20
- Platinum: about 90/10
These are averages across all covered care, not the coinsurance on every bill. Your actual deductible, copays and coinsurance depend on the plan.
There’s a trade-off. When you browse plans on HealthCare.gov, you’ll usually see that higher tiers like platinum have higher monthly premiums. You pay more up front but less when you use your coverage. Bronze plans tend to have lower premiums, offset by higher costs when you get care. For more, see Marketplace Metal Tiers.
Extra Savings on Silver Plans
Silver plans have one special feature. If your income qualifies, you may get cost-sharing reductions, which lower your deductible, copays and out-of-pocket maximum. These are available only on silver plans.
When you enter your income on HealthCare.gov, it shows whether you qualify for a premium tax credit and how much it might be. It also shows whether you qualify for cost-sharing reductions.
If you do, look closely at silver plans. At lower incomes, a silver plan with cost-sharing reductions can have cost sharing as good as, or even better than, a gold or platinum plan.
When Can You Enroll in a Marketplace Plan?
There are two times you can enroll: during Open Enrollment each year, or during a Special Enrollment Period if you qualify.
On HealthCare.gov, Open Enrollment for 2027 coverage runs from November 1, 2026, through January 15, 2027. States that run their own marketplace may set different dates.
To get a Special Enrollment Period, you generally need a qualifying life event. The most common fall into three groups:
- A move: moving to a new area will often qualify you.
- A change in household: having a baby, getting married or getting divorced, for example.
- A change in coverage: losing your health insurance, such as when you leave a job.
Six Questions to Ask When Comparing Health Insurance Plans
When it’s time to shop, ask yourself these questions:
- Where am I eligible to shop, and do I qualify for marketplace savings?
- What will I pay in premiums for a full year?
- What could I pay when I use care, counting the deductible, copays, coinsurance and out-of-pocket maximum?
- Are my doctors, hospitals and prescriptions covered and in network?
- What referrals or prior authorizations does the plan require?
- Will the plan still fit if my health needs change during the year?
Say Plan A has a much lower monthly premium but higher costs when you use care, and Plan B has a higher premium but lower costs when you use care. Run both through the same six questions to see which one really fits your needs.
Once you can answer these, you don’t have to guess. Start with one real plan you’re considering: add up a full year of premiums, check what you’d pay for the services, doctors and prescriptions you use, and find the most you could owe. Then compare it with other plans.
Get Help Comparing Plans
Our licensed brokers can compare plans in your area side by side at no cost to you. Get your free quotes or call us at (866) 260-9829.
