How Health Insurance Actually Works

When you see a doctor, the provider bills a total amount — that's the claim. It's not what you owe; it's the full cost before your insurance steps in. Pick an example below and see how each plan tier splits that bill between you and your insurer.

Choose an Example

Select a common medical event to see the total billed cost — then watch how each plan handles it.

BronzePremium: $350/mo
You payInsurance pays
$5,000
Deductible Coinsurance Insurance

You pay
$5,000
Insurance pays
$0
Your share
100%
Deductible: $5,800Coinsurance: 40%PCP Copay: $60
Out-of-Pocket Maximum remaining$4,800 of $9,800

Per individual. Family plans have a separate, higher limit that caps total spending across all covered members.

SilverPremium: $450/mo
You payInsurance pays
$2,500
$875
$1,625
Deductible Coinsurance Insurance

You pay
$3,375
Insurance pays
$1,625
Your share
68%
Deductible: $2,500Coinsurance: 35%PCP Copay: $55
Out-of-Pocket Maximum remaining$5,225 of $8,600

Per individual. Family plans have a separate, higher limit that caps total spending across all covered members.

GoldPremium: $550/mo
You payInsurance pays
$930
$3,720
Deductible Coinsurance Insurance

You pay
$1,280
Insurance pays
$3,720
Your share
26%
Deductible: $350Coinsurance: 20%PCP Copay: $25
Out-of-Pocket Maximum remaining$6,520 of $7,800

Per individual. Family plans have a separate, higher limit that caps total spending across all covered members.

PlatinumPremium: $650/mo
You payInsurance pays
$4,500
Deductible Coinsurance Insurance

You pay
$500
Insurance pays
$4,500
Your share
10%
Deductible: $0Coinsurance: 10%PCP Copay: $15
Out-of-Pocket Maximum remaining$4,000 of $4,500

Per individual. Family plans have a separate, higher limit that caps total spending across all covered members.

Good to know: Deductibles, coinsurance totals, and out-of-pocket maximums all reset on January 1 every year — not on your policy's renewal date. A surgery in December and a follow-up in January count against two separate years.

Key Terms, Plain English

Deductible

What you pay out of pocket before insurance starts sharing the bill. A Bronze plan has a higher deductible but a lower monthly premium — you're betting on staying healthy.

Coinsurance

Once you've met your deductible, you and your insurer split what's left. “20% coinsurance” means you pay 20 cents on the dollar; insurance picks up the other 80.

Out-of-Pocket Maximum

Your yearly ceiling. After you've paid this much in deductibles, copays, and coinsurance, insurance covers everything else at 100%. Family plans have two limits: one per individual member, and a higher one for the family as a whole. Once the family limit is reached, everyone is covered — even if some members haven't hit their individual cap.

Copay

A flat fee for routine services — doctor visits, urgent care, prescriptions. Copays skip the deductible entirely: you pay the copay and insurance handles the rest. Try “Doctor Visit” above to see the difference. Bigger-ticket services like ER visits and surgery still go through the deductible.

Preventive Care

Annual checkups, screenings, and immunizations are 100% covered under the ACA — no copay, no deductible, no matter which plan tier you're on. It's one of the most underused benefits in health insurance. Try “Annual Checkup” above.

The Trade-Off

Lower premiums mean higher costs when you actually need care; higher premiums mean lower costs at the doctor's office. There's no universally “best” plan — the right choice depends on how much care your team expects to use.

Prescription Drug Costs

Most plans tier medications separately from medical services. Here's what a typical fill looks like across plan levels.

Drug TierBronzeSilverGoldPlatinum
GenericMetformin, Lisinopril, Atorvastatin$20$20$15$10
Preferred BrandEliquis, Jardiance, Ozempic40%*$75$50$25
Non-Preferred BrandBrand-name with no generic equivalent40%*$105$80$40
SpecialtyHumira, Stelara, chemotherapy drugs40%*30%20%10%
Rx DeductibleApplies to brand-name drugs before copay kicks in$450$300

*Bronze coinsurance: Bronze plans charge a percentage (40%) instead of a flat copay for brand-name and specialty drugs. Your cost depends on the drug's price — a $200 brand-name drug costs you $80; a $1,000 specialty drug costs $400.

Generic vs. Brand: Always ask your doctor about generics. The same active ingredient can run $10–$20 as a generic vs. $50–$105 as a brand name — that's $400+ per year in savings on a single prescription.

Rx Deductible: Bronze ($450) and Silver ($300) plans have a separate prescription deductible for brand-name drugs. Generics are usually exempt. Once you've met it, your normal copays or coinsurance kick in for the rest of the year.

Specialty drugs: Every tier uses coinsurance for specialty medications, capped at $250–$500 per fill. If you take a specialty drug, Platinum (10%) saves significantly over Bronze (40%) despite the higher premium.

Not sure which tier fits your team? That's what we're here for.

We'll walk through your group's needs and find the right balance of premium and protection.

Talk to a Broker →

The numbers above are based on Blue Shield PPO plan designs available through Covered California for Small Business. They illustrate how cost-sharing works in general — actual benefits vary by carrier, plan, and network type. Routine services like doctor visits and urgent care typically use a flat copay that bypasses the deductible; try those presets above to see the difference. HMO plans and other carriers may structure things differently. Contact us for specifics on plans available to your group.