Question

Which answer uses the terms premium, deductible, and out-of-pocket maximum correctly?
A.You pay a monthly premium for your health insurance. You pay for health services until you meet your deductible. Once you meet your out-of-pocket maximum, your insurance pays the rest of your health care costs for that year.
B.You pay a monthly deductible for your health insurance. You and your health insurance company share health care costs by paying separate premium costs. Once you meet your out-of-pocket maximum, your insurance company pays your health care costs except for your copays.
C.You pay a monthly premium for your health insurance. Your insurance will cover a specific percentage of your health insurance costs up to an out-of-pocket maximum. Once you have reached your maximum limit, your only out-of-pocket expense is your deductible.
D.You pay a monthly deductible for your health insurance. When you use your health insurance, you will pay your premium out-of-pocket. Once you meet your out-of-pocket maximum for the year, your insurance will pay the remaining amount of your health care costs.

Answer 1

A.

Explanation: A correctly uses the terms — premium = monthly payment to have coverage; deductible = amount you pay for covered services before your plan starts sharing costs; out-of-pocket maximum = the annual cap on what you pay for covered care (after which the insurer pays 100% of covered costs).