• Premium: The monthly fee you pay to the insurance company.

• Deductible: The amount you have to pay for a good or service before your insurance kicks in and covers the rest of your cost.

• Copayment: Also abbreviated as copay, this is the flat rate you pay for a good or service that's covered by your insurance.

• Coinsurance: This is when you still have to pay some of the costs above the deductible, usually a percentage value.

• Out-of-pocket maximum: If your combined payment for deductibles, copay, and coinsurance goes above this amount within a year, everything above that is paid by your insurance company.

Let's go with an example to illustrate how these all interact. You have an insurance plan with a $2,000 deductible, 20% coinsurance, $100 copay for a doctor's visit, and an out-of-pocket maximum for $4000. You get into an accident that requires surgery; the hospital bills your insurance company for $10,000. This means you've gotta pay $2,000 to cover your deductible. Of the remaining $8,000, also you have to pay 20%, or $1,600, as coinsurance. You have five followup appointments with the doctor to see how you're recovering. You pay your $100 copay for the first four appointments, but the fifth appointment doesn't require a copay, because it's above your out-of-pocket maximum.

Now, there are plans out there that have lower deductibles, copays, coinsurance, and/or out-of-pocket maximums, but those usually have the tradeoff of charging a higher monthly premium. Some insurers also have special deals with medical providers where they get better rates; you get full benefits if you use those providers ("in-network"), but you only get partial or no benefits if you use others outside the network.

Most insurance is provided by one's company, usually with a discounted premium. The US government also has several insurance programs: Medicare for the elderly, Medicaid for those below the poverty line, VA benefits for veterans.