Boning Up on Premiums, Deductibles & Co-payments

What Medicare pays toward your Medical Care is coverage. What you contribute out of your own pocket can be several kinds of expenses: premiums, deductibles, and co-payments. If you had US-style health insurance before, you know exactly what these terms mean. If not here’s a quick primer:

  • Premium:  a premium is an amount you pay each month to receive coverage. In other words, it’s your entrance ticket to the program.
  • Deductible: a deductible is an amount you paid before coverage kicks in.  You can think of it as a kind of down payment before getting the goods.
  • Copayment: this amount is what you pay as your share of the cost of each service you receive. Strictly speaking, co-pays are fixed dollar amounts (such as $20), whereas is coinsurance is the correct term when you share is a percentage of the cost (such as is 20%). But because coinsurance is too wonky for words, I use co-pays in these pages.


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