Understanding the different types of costs
Some healthcare costs are fixed, like monthly premiums. Other costs come when you use your coverage for things like screenings and lab work. Knowing how these costs work together can help you plan ahead to avoid surprises.
Quick tip
Blue Shield negotiates with network providers to lower costs for covered healthcare services, helping you pay less out of pocket. Going out of network for care may result in higher out of pocket costs for covered services.
Explore key healthcare cost terms
Premium
A premium is a fixed monthly payment for your coverage, like a monthly gym membership fee. It includes coverage for preventive care services to maintain your health and protection from unexpected, high medical costs.
Depending on the type of plan you have, this cost may be paid by you, your employer, or shared with your employer. In some cases, your plan's premium may be subsidized or covered by the state and/or federal government.
Deductible
The plan year deductible is what you must pay out of pocket each year for certain covered services or medications before Blue Shield begins to share costs with you. For example, if you have a $1,500 deductible, you are responsible for paying the first $1,500 of eligible medical costs before sharing costs with Blue Shield.
Deductibles for family coverage and individual coverage are different. An individual health plan only has one deductible. Family plans can have individual and family deductibles. Your deductible depends on your plan and is displayed on your ID card.
You pay a fixed amount for certain medical services or prescription drugs.* For prescription drugs, if the cost is less than the copay, you pay the lower price.
*Prescription drug coverage varies by plan.
You pay a percentage of each medical visit or prescription drug, until you reach your annual out-pocket-maximum.
Out-of-pocket maximum
The out-of-pocket-maximum is the most you are required to pay for covered services in a plan year. Once you reach your out-of-pocket-maximum, Blue Shield pays 100% of eligible covered services for the plan year. Some plans have a separate out-of-pocket maximums for in-network and out-of-network providers. Visit your Explanation of Coverage (EOC) for details.