Health insurance is confusing. As younger generations (millennials and Gen Z) navigate the complexities of adulthood, one crucial aspect that often gets overlooked is health insurance. Understanding the ins and outs of health insurance can seem daunting, but it is an essential component of maintaining physical and financial well-being. In this comprehensive guide, we will demystify health insurance for millennials and Gen Z, focusing on deductibles, co-pays, and out-of-pocket expenses.


When it comes to health insurance, deductibles play a significant role in determining how much you will pay out of pocket before your insurance coverage kicks in. A deductible is the predetermined amount that you must pay for covered services before insurance starts covering a portion of the costs. For example, if your deductible is $1,000, you are responsible for paying the first $1,000 of medical expenses before your insurance starts sharing the costs. It’s important to note that preventive services, such as annual check-ups and vaccinations, are often covered without requiring you to meet your deductible first.


Co-pays, short for co-payments, are a fixed amount you pay for specific healthcare services, such as doctor visits or prescriptions. Unlike deductibles, which are paid before insurance coverage kicks in, co-pays are paid at the time of service. For instance, you might have a $25 co-pay for primary care visits, meaning you pay $25 at each doctor’s appointment. Co-pays can vary depending on the type of service and the insurance plan you have. It’s important to review your policy details to understand how much you’ll be responsible for paying.


Co-insurance refers to the percentage of a medical expense that an insured individual is responsible for paying after the deductible has been met. It is a cost-sharing mechanism between the insurance company and the policyholder. Once the deductible has been satisfied, the insurance company pays a percentage of the covered costs while the policyholder is responsible for paying the remaining percentage, known as co-insurance.

For example, let’s say you have a health insurance plan with a $1,000 deductible and a 20% co-insurance. If you incur a medical bill of $5,000 and have already met your deductible, your insurance company will cover 80% (or $4,000) of the costs, and you will be responsible for paying the remaining 20% (or $1,000) as co-insurance.

It’s important to note that co-insurance typically applies to covered services, meaning services that are included in your insurance plan. Not all services may be covered, so it’s essential to review your policy details to understand which services are eligible for co-insurance.

Out-of-Pocket Expenses

In addition to deductibles and co-pays, understanding out-of-pocket expenses is crucial for effectively managing your healthcare costs. Out-of-pocket expenses include any costs you are personally responsible for paying beyond your deductible and co-pays. Plainly, out-of-pocket expenses – or what you actually pay for health services including deductibles, co-pays, and co-insurance – are tracked and added up. Once you reach a certain amount paid (this can be high – sometimes in the $10,000 range) you will reach your maximum and there will be no more payment required on your part.

Navigating the Health Insurance Landscape

As a millennial or Gen Z individual, you have several options for obtaining health insurance coverage. Here are a few common options to consider:

  1. Employer-Sponsored Coverage:
    Many millennials and Gen Z individuals receive health insurance coverage through their employers. These plans often offer a range of coverage options and employer contributions to help mitigate the cost.
  2. Marketplace Plans:
    If you don’t have access to employer-sponsored coverage, you can explore health insurance options through the Affordable Care Act (ACA) marketplace. These plans vary in coverage and cost, and you may be eligible for government subsidies based on your income and other factors.
  3. Parent’s Insurance:
    If you are under 26 years old, you may be eligible to stay on your parent’s health insurance plan. This can be a cost-effective option, especially if your parents have a family plan that covers dependents.

Tips for Maximizing Your Health Insurance Coverage

  1. Stay in-network: Choosing healthcare providers within your insurance network can help minimize out-of-pocket expenses.
  2. Understand coverage limits: Familiarize yourself with any coverage limits or exclusions specified in your policy, such as maximum annual limits or specific services that may not be covered.
  3. Keep track of expenses: Maintain records of your medical expenses, including bills, receipts, and explanation of benefits (EOB) statements. This documentation can be helpful for tax purposes and disputing any billing errors.
  4. Utilize preventive services: Take advantage of no-cost preventive services to catch health issues early and save on potential future costs.


Navigating health insurance as a millennial or Gen Z individual may seem overwhelming, but understanding the key components of deductibles, co-pays, and out-of-pocket expenses is crucial. By familiarizing yourself with these concepts and exploring the available options, you can make informed decisions to protect your health and financial well-being. Remember to carefully review policy details and seek assistance from insurance professionals or healthcare providers when needed. With the right knowledge, you can confidently navigate the world of health insurance and make choices that best suit your needs.