Healthcare

# How does American health insurance work?

## Deductibles, copays and networks explained for South Africans

Reviewed: November 12, 2026

SA Connect editorial guide

If you are used to South African medical aid, some American insurance terms may sound familiar while working differently in practice. A monthly premium does not usually mean every appointment or prescription is fully paid for.

Start with three questions: What do I pay each month? What might I pay when I need care? Which doctors, hospitals and medicines does this particular plan cover?

## Learn the main cost terms

- **Premium:** The amount paid to keep your coverage active, even in a month when you do not use it.

- **Deductible:** The amount you pay for certain covered services before the plan starts sharing those costs. Some services may be covered before you meet it.

- **Copayment, or copay:** A set amount for a covered service, such as a stated charge for an office visit.

- **Coinsurance:** Your percentage share of a covered service’s cost, usually after the applicable deductible.

Do not assume every service follows the same sequence. A plan may have office-visit copays before the deductible, separate prescription rules or different family deductibles. Read the actual benefit document.

Source: [HealthCare.gov: premiums, deductibles and other costs](https://www.healthcare.gov/choose-a-plan/your-total-costs/).

## A simple example

Imagine a covered, in-network service has an allowed cost of $200. If its deductible has already been met and your coinsurance is 20%, your share would be $40 and the plan’s share $160.

This is an illustration, not a price estimate. If the deductible has not been met, or that service uses a different copay rule, the calculation changes. The provider’s advertised charge may also differ from the amount your plan recognises.

## What does the out-of-pocket maximum mean?

For covered in-network benefits, a plan’s out-of-pocket maximum limits the qualifying deductible, copay and coinsurance amounts you pay during the plan year. Once you reach it, the plan pays the covered in-network benefit costs for the rest of that year.

It is not a cap on every expense. Premiums, non-covered services and most out-of-network costs are not included in the Marketplace limit. Amounts above a plan’s allowed charge may also be excluded. Check individual and family limits and when the plan year resets.

Source: [HealthCare.gov: out-of-pocket maximum](https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/).

## Why the network matters

A network is the group of providers and facilities contracted with your particular plan. A practice saying it “accepts” an insurance company does not necessarily confirm participation in your exact plan.

HMOs and EPOs generally restrict routine coverage to their networks, with exceptions such as emergencies. PPOs generally allow out-of-network care at a higher cost. POS plans typically require a primary-care referral for a specialist.

Check the exact plan’s provider directory, then confirm with both the insurer and the provider before planned care. Also ask whether a referral or prior authorisation is needed. Emergency coverage has additional protections and exceptions; do not delay emergency care to work through an insurance checklist.

Source: [HealthCare.gov: plan and network types](https://www.healthcare.gov/choose-a-plan/plan-types/).

## Compare more than the monthly premium

For each candidate plan, review its Summary of Benefits and Coverage, provider directory and covered-drug list. Check your actual medicines, preferred pharmacy, doctors and hospitals.

A useful comparison sheet includes:

- Your share of the monthly premium.

- Deductible and out-of-pocket maximum.

- Primary-care, specialist, urgent-care and hospital cost rules.

- Prescription coverage and any authorisation requirements.

- Network access near home and work.

- Coverage start date and the plan-year dates.

Bronze, Silver, Gold and Platinum Marketplace categories describe how costs are shared, not the quality of the doctors. The lowest premium may not produce the lowest total cost for your household.

Source: [HealthCare.gov: comparing plans](https://www.healthcare.gov/choose-a-plan/comparing-plans/).

## Newcomers must check eligibility separately

Do not assume every South African newcomer qualifies for the same coverage or financial assistance. Immigration status, household circumstances, state rules and the coverage year matter.

**Important for 2027:** As checked on November 12, 2026, HealthCare.gov states that, from January 1, 2027, Marketplace savings are limited by immigration status to lawful permanent residents, Cuban or Haitian entrants, and COFA migrants. Other statuses may qualify to buy Marketplace coverage without those savings. Being eligible for coverage and being eligible for financial help are different questions.

Confirm the current rule for your own situation with the Marketplace or a certified enrolment assister before budgeting around a subsidy. Do not assume a refugee’s eligibility matches that of a green-card holder.

Sources: [HealthCare.gov: immigration status and Marketplace eligibility](https://www.healthcare.gov/immigrants/immigration-status/) and [getting help with an application](https://www.healthcare.gov/apply-and-enroll/get-help-applying/).

## Before you choose

Ask the insurer or benefits team to explain one routine visit, one prescription and one larger treatment under the plan. Request the relevant written benefit details, not just a verbal promise.

This guide explains terminology, not an individual coverage determination or medical recommendation. Your plan documents and current eligibility rules govern.