Understanding the language used in health insurance can make comparing Medicare options easier. Premiums are only one part of the total cost.

Premium

A premium is the amount you pay regularly to maintain coverage. Some people qualify for premium-free Part A, while Part B and other coverage may have premiums.

Deductible

A deductible is an amount you pay for certain covered services before the plan begins paying according to its rules.

Copayment

A copayment is a fixed amount you pay for a covered service or prescription, such as a set fee for a visit.

Coinsurance

Coinsurance is usually a percentage of the allowed cost for a covered service. The amount depends on the coverage and applicable rules.

Estimate total annual costs

Consider premiums, deductibles, likely doctor visits, prescriptions, tests, and any additional coverage. For Medicare Advantage, check the plan’s maximum out-of-pocket limit for covered Part A and Part B services. Original Medicare by itself generally has no annual out-of-pocket maximum.

Avoid common mistakes

Do not choose coverage based only on a low premium. Check provider access, prescriptions, service rules, and costs you may face if you need unexpected care.

Important: Medicare costs and plan benefits can change annually. Use current official information at Medicare.gov before making decisions.