If he has $900 of medical expenses, the insurance company still pays nothing. If he has $2,000 of medical expenses, then he pays the first $1,000 and then the insurance company would pay the next $1,000. If he has $10,000 in medical expenses, he would pay the first $1,000 and then the insurance company would pay the next $9,000. If Paul chooses the high deductible plan, he will have to pay the first $2,500 of any medical costs. The high deductible plan costs $7,500 a year. And it makes sense that the high deductible plan costs less than the low deductible plan because here the insurance doesn't kick in until he has over $2,500 of medical expenses while here it was only 1,000. To help himself choose a plan, Paul found some statistics about common health problems for people similar to him.