How to Read a Health Insurance Quote in Five Minutes
Most people compare plans by the monthly premium and stop there. The premium is the price of admission. The other numbers decide what a bad year costs you. Here is how to read all of them.
Premium
What you pay every month whether you use the plan or not. Lower is not better on its own; it usually means a higher deductible or a narrower network.
Deductible
What you pay out of your own pocket for covered care before the plan starts paying. Preventive care is typically covered before the deductible. On a family plan there is an individual deductible and a family deductible.
Coinsurance and copays
After the deductible, coinsurance is the percentage you still pay, for example 20 percent. Copays are flat amounts for a visit or a prescription. Some plans have copays before the deductible for office visits, which matters if you see a doctor often.
Out-of-pocket maximum
The most you can pay in a plan year for covered in-network care. After this the plan pays 100 percent. This is the number that protects you from a catastrophe, and it is the one most people never look at.
Network type
PPO lets you see any provider, with lower costs in-network and some coverage out-of-network. HMO requires you to stay in-network and often needs a referral for specialists. EPO is in-network only without referrals. Check that your doctors and the hospital you would actually use are in it.
Prescription tiers
Generic, preferred brand, non-preferred brand, specialty. Your medication's tier decides whether it costs you a small copay or a large one. Send me your medication list and I check each plan's formulary before you choose.
The three numbers that matter
- Premium times twelve: your fixed annual cost.
- Out-of-pocket maximum: your worst-case additional cost.
- Add them: your true worst-case year. Compare plans on that number, not the premium alone.
Rate guarantees and renewals
Some private plans lock the rate for a period. Ask how long and what happened at the last renewal. I show you that history before you commit.
Frequently asked questions
Is a lower deductible always better?
Not if you rarely use care. A higher deductible with a much lower premium can leave you ahead in a normal year. Compare on the worst-case total, premium plus out-of-pocket maximum.
What does 'in-network' really mean?
The carrier has a contract with that provider at negotiated rates. Out-of-network care costs more and on an HMO is usually not covered at all except in an emergency.
What is a formulary?
The plan's list of covered drugs and their tiers. If your medication is not on it, you pay full price. Always check before enrolling.
Can you read my current plan and tell me if it's any good?
Yes. Send me the summary of benefits and I will walk through it with you and show you what else is available.
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Written by Frank Caballero, licensed insurance producer, NPN 21032307. Last updated 2026-10-17. General information, not tax or legal advice.