How Deductibles & Coinsurance Work

Deductibles, coinsurance, copays and out-of-pocket maximums are the basic elements to any health care plan. In short: you will first pay your deductible, then you will pay the percentage of coinsurance on your policy up to the out-of-pocket maximum, and then the plan will pay the rest of your costs for the remainder of the year.


A deductible is the amount that you pay for medical services before the plan begins to contribute toward expenses.  In all of IU’s medical plans, you will pay 100% of the costs (at the “discounted” contracted rate) for medical services until you reach the deductible (except for in-network preventive medical services which are covered by the plan at 100%). 

For the HDHP, all covered services, including prescriptions, are subject to the deductible except for wellness/preventive medical services and preventive prescriptions. For the $500 Deductible plan, the deductible applies to all covered services except emergency room and in-network urgent care center copays, preventive medical services, prescription drugs (except drugs administered in a physician’s office), and transplants.

2023 In-Network Deductibles

Anthem PPO HDHP:

  • $1,800 for employee only coverage / $3,600 all other coverage levels

Anthem PPO $500:

  • $500 per individual / $1,500 family maximum

The deductible works difference depending on the type of plan (HDHP or traditional) and your elected level of coverage.

Anthem PPO HDHP:

  • For HDHPs, as each family member incurs medical expenses, the amount paid toward these expenses is credited to the family’s deductible. When these individual expenses add up to the family deductible, the plan will begin paying its share of the cost of healthcare expenses for members of the family.
  • The family deductible can be satisfied by one or more family members. This means that when you cover members of your family, there is no individual deductible—only the family deductible must be met before the plan pays its share of the cost of healthcare expenses for any family member.

Anthem PPO $500:

  • For this type of plan, each family member has an individual deductible, and the family as a whole has a family deductible. As medical expenses are incurred, the amount each family member pays toward these expenses is credited to their individual deductible and to the family deductible.
  • There are two ways the plan will begin to pay its share of the cost of healthcare expenses for a particular individual within the family.
    1. If an individual meets his or her individual deductible, the plan begins to pay its share of the cost of healthcare expenses for that individual only, but not for the other family members.
    2. If the family deductible is met, the plan begins to pay its share of the cost of healthcare expenses for all members of the family whether or not they’ve met their own individual deductibles.
  • Each enrollee may contribute no more than the amount of the individual deductible to the family deductible.


In addition to a deductible, health insurance also has coinsurance. Coinsurance is the percentage of the costs that you share with the plan once you have met your deductible. Each of IU’s medical plans has your share of the coinsurance for in-network care set at 20%. That means you will pay 20 percent and the plan will pay 80 percent of the costs for in-network services once the deductible has been met. You will continue to pay this amount until your out-of-pocket costs reach the annual out-of-pocket maximum.

There is a completely separate deductible and coinsurance rate for both Anthem plans when out-of-network providers are used.

Out-of-Pocket Maximums

The Out-of-Pocket Maximum protects you from high medical bills. When the deductible and coinsurance amounts that you’ve paid equal the plan’s out-of-pocket maximum then the plan pays 100% of covered charges for the remainder of the plan year.

2023 In-Network Out-of-Pocket Maximums

Anthem PPO HDHP:

  • $3,600 for employee only coverage / $7,200 all other coverage levels

Anthem PPO $500:

  • $2,400 per individual / $7,200 family maximum

Special Notes regarding Prescriptions:

For all medical plans, there are some prescriptions that are covered by the plan at 100%, as defined by the Affordable Care Act (ACA). 

For the HDHP, there are additional preventive medications that are allowed to bypass the deductible and are subject only to coinsurance. For those preventive prescriptions, you only pay the 20% coinsurance. Download the list of preventive medications or contact CVS Caremark directly at or 1-866-234-6952.

The $500 Deductible plan has set copays for prescriptions. These copays do not apply towards the plan’s medical deductible, coinsurance, or out-of-pocket maximum. Retail and mail order prescription copays are based on a tiered drug list. In general, Tier 1 is generic drugs, Tier 2 is preferred brand drugs, and Tier 3 includes non-preferred drugs. There is a separate out-of-pocket maximum for in-network prescriptions.