Deductibles and copays work very differently — and mixing them up leads to unpleasant financial surprises. Here is a clear breakdown of both, with a real example showing how OON therapy costs accumulate over a year.
What Is a Deductible?
A deductible is the amount you pay out-of-pocket for covered services before your insurance starts contributing. Deductibles reset on January 1 each year (for calendar-year plans).
Example: Your plan has a $1,500 in-network deductible and a $3,000 OON deductible. Until you have personally paid $3,000 toward covered OON services, your insurer pays $0 toward OON therapy claims. After the deductible is met, coinsurance kicks in.
What Is Coinsurance?
After meeting the deductible, coinsurance is the split between what you pay and what the insurer pays. Common splits: 30/70 (you pay 30%, insurer pays 70%) or 20/80 (you pay 20%, insurer pays 80%). Coinsurance is applied to the allowed amount — not what your therapist charged.
What Is a Copay?
A copay is a flat dollar amount you pay per visit, regardless of the cost of the service. Example: $40 copay per therapy session. Copays are more common on HMO and EPO plans; PPO plans more often use deductible + coinsurance. Some PPO plans charge a copay for in-network visits but apply deductible + coinsurance for OON.
OON Deductible vs. In-Network Deductible
Nearly all PPO plans have separate deductibles for in-network and out-of-network care:
- In-network deductible: $500–$1,500/year is common on employer plans
- OON deductible: $2,000–$5,000/year is common; some plans go as high as $7,500
Paying toward in-network services does not count toward your OON deductible on most plans. Clients who use OON therapy primarily are starting from zero toward a separate, higher deductible.
Out-of-Pocket Maximum
The out-of-pocket maximum is a cap on how much you will pay in a plan year. Once you hit it, the insurer covers 100% of covered services (in-network, and OON if the OOP max includes OON spending). For 2025, the ACA-set OOP maximum is $9,450 for individual plans. Some plans have separate OON OOP maximums that are higher.
A Real-World Example
Scenario: Your therapist charges $200/session. Your plan has:
- OON deductible: $1,500
- OON coinsurance: 30% (you pay), 70% (insurer pays)
- OON allowed amount for 90837 in your area: $150
- OON out-of-pocket maximum: $5,000
Sessions 1–8 (deductible phase): You pay $200/session. Insurance applies $150 (the allowed amount) toward your deductible each time. After 10 sessions, you have paid $2,000 out of pocket but only satisfied $1,500 of your deductible (because the insurer uses the allowed amount, not what you paid).
After deductible met: Insurance now pays 70% of $150 = $105 per session. You still pay $200 to your therapist, but receive $105 back = effective cost of $95/session.
How to Calculate Your Expected Annual Reimbursement
- Find your OON deductible and coinsurance from your benefits summary
- Look up the UCR allowed amount for 90837 in your zip code (FAIR Health at fairhealthconsumer.org)
- Estimate sessions per year (e.g., 40 weekly sessions)
- Calculate sessions needed to meet deductible: deductible ÷ allowed amount
- Remaining sessions × allowed amount × (1 - your coinsurance %) = annual reimbursement