Health Plan Basics

Reviewing these key health care terms will help you choose the right Medicare plan.

For detailed definitions, refer to our Glossary.

Common Terms

Deductible

The fixed amount you pay for covered services in a plan year. Most preventive care is fully covered even before you pay your deductible.

Copayment

The fixed amount you pay for covered services after you’ve paid your deductible.

Co-insurance

The percentage of costs you pay for covered services after you’ve paid your deductible.

Out-of-Pocket Maximum

The most you have to pay for covered services in a plan year. This limit doesn’t include your monthly premiums or services your plan doesn’t cover.

HMO verses PPO – What’s the difference?
HMO Health Maintenance Organization

You must get your health care from doctors and hospitals that are part of the plan's network. You also need to choose a primary care doctor who will manage your care and give you referrals to specialists. If you receive care outside of your plan's network, the costs won't be covered, except for emergency care.

PPO Preferred Provider Organization

You can choose to see any doctor or go to any hospital. However, a PPO plan has a preferred network of doctors and hospitals. If you get care from the plan's network, your costs are usually lower. If you choose out-of-network doctors and hospitals, they may cost more. You don't need to choose a primary care doctor or get referrals.