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health insurance terms

5 Common Health Insurance Terms

Premium & deductible

A premium is the amount of money you pay each month for your health insurance policy. A deductible is paid separately and is part of your out-of-pocket maximum.

Each year you’ll start off paying for your medical bills but only up to the amount of your deductible. Once you’ve met your deductible, your insurance company begins to pay its share (for covered services), and you’ll only pay the copay or coinsurance. Choosing a health insurance plan with a higher premium means you will have a lower deductible. Whereas a lower premium would give you a higher deductible.

Out-of-pocket cost

This is the total amount you will pay for health care each year. It does not include your premium rate. Typically, your deductible, copays, and coinsurance are what make up your out-of-pocket cost.


A referral is like an official doctor’s note from your doctor. You will notify a specialist that you require services from them. After the insurance company approves the referral, you can make an appointment with that specialist.


A subsidy is an amount of money the government is required to pay towards your health insurance. Only if you are eligible for a subsidy, and this depends on your income and household size. You could receive tax credits, pay lower prices on health care services and prescriptions, or both.

Cosmo Insurance Agency is a full-service independent insurance agency based in Hackensack (Bergen County) and Lakewood (Ocean County), New Jersey that offers an all-encompassing range of insurance options for both individuals and businesses. Cosmo keeps its promise to assure an efficient and creative approach to the services we offer. Each of our clients experience a personalized and long-term relationship with us. Our New Jersey based team of health brokers guides our clients in helping them choose the most cost-effective options. By incorporating our knowledge of the insurance guidelines for healthcare, employee benefits, life insurance, self-insurance, dental, disability, and long term care insurance, we keep our clients up-to-date with affordable plans that cover all their specific insurance needs.