Finance

Chinese electric car company Xpeng said this week it plans to roll out driver-assist technology in Europe by the end of next year.
The company also said it remains on track with plans to expand the tech to 50 cities in China by the end of this year.
Xpeng co-president Brian Gu claimed the company is seeing “an inflection point” in China for consumer adoption of driver-assist technologies.

An Xpeng G9 electric vehicle at the Xpeng pavilion in the Open Space area during the Munich Motor Show (IAA) in Munich, Germany, on Sept. 5, 2023.
Bloomberg | Bloomberg | Getty Images

BEIJING — Chinese electric car company Xpeng said this week it plans to roll out driver-assist technology in Europe by the end of next year, and remains on track with plans to expand the tech to 50 cities in China by year-end.
U.S.-based Tesla’s version for city streets — called Full Self-Driving Beta — has yet to be released in China and it’s unclear how many of the driver-assist features are available in Europe.

Deployment of such tech is subject to regulatory approval.
Xpeng needs time to test and localize its driver-assist software in Europe, Brian Gu, honorary vice chairman of Xpeng’s board of directors and co-president, told reporters Wednesday. He declined to provide details on planned availability.
He said the startup is cooperating with EU regulators on their recently announced probe into subsidies at Chinese electric vehicle companies, and the company is taking a “stringent approach” to comply with Europe’s GDPR data protection rules.

In China, Xpeng said in June it could start rolling out its tech, called XNGP, for drivers on some major expressways in the capital city of Beijing.
That followed the company’s release of urban scenario driver-assist tech for users in Shanghai in March, after an earlier rollout in Shenzhen and Guangzhou.

The system, available to users of certain car models for a fee, claims to make driving easier with software that assists with smooth braking at traffic lights, turning at intersections and other tasks on city streets.
More than 90% of users in Beijing with the driver-assist feature have turned it on, Xpeng’s Gu said.
He claimed the company is seeing “an inflection point” in China for consumer adoption of driver-assist technologies. Gu said the tech was the most important feature consumers wanted for the 2024 version of the G9 SUV.
The car, released in late September, starts at 263,900 yuan ($36,060), and costs 289,900 yuan ($39,613) with XNGP driver assist. The price for Tesla’s Model Y in China also starts at 263,900 yuan.
Xpeng claims the software makes driving easier by helping with smooth braking at traffic lights, turning at intersections and other tasks on city streets.

Read more about electric vehicles, batteries and chips from CNBC Pro More

Morgan Stanley said that Ted Pick will succeed James Gorman as CEO at the start of 2024.
Pick, co-president of Morgan Stanley for the last two years, led the bank’s institutional securities group, which includes investment banking and trading activities.
Among insiders, Pick has long been considered frontrunner for CEO because of his reputation for turning around two risky businesses: equities and fixed income operations.

James Gorman, Morgan Stanley CEO, July 18, 2023.

Morgan Stanley said Wednesday that Ted Pick will succeed James Gorman as CEO at the start of 2024.
Pick, a Morgan Stanley veteran who rose through the ranks to lead the bank’s Wall Street operations, will also join the New York-based bank’s board, according to the release.

Gorman will stay on as executive chairman for an undisclosed period.
The announcement ends the top succession race on Wall Street. Morgan Stanley announced in May that Gorman intended to step down within a year and that it would select his successor from one of the bank’s three main division heads.
Pick led the bank’s institutional securities group, which includes investment banking and trading activities, and was co-president of Morgan Stanley for the last two years.

Pick’s reputation

Among insiders, Pick has long been considered frontrunner for the CEO job because of the complexity and risks involved with leading one of Wall Street’s top firms. Pick, who graduated from Middlebury College and has a Harvard MBA, joined Morgan Stanley in 1990.
He earned his reputation by whipping several businesses into shape during an uncertain time for Morgan Stanley. The bank nearly capsized during the 2008 global financial crisis and needed a $9 billion injection from Mitsubishi bank.

In the aftermath of that tumultuous period, Pick led Morgan Stanley’s equities division to become the global leader by revenue, in part with technology investments for quant investors and an emphasis on becoming a top prime broker to hedge funds.
Then, he was assigned to lead the bank’s ailing fixed income business, where he was credited with another turnaround. That performance led to his most recent role, as head of all Wall Street activity, and ultimately his promotion to CEO.

‘Battle-tested’

“The Board’s selection of Ted Pick is an outstanding one,” Gorman said in the release. “I have worked side by side with Ted since the financial crisis and have experienced first-hand his values, intellect, passion and commitment to our people and our clients.”
“He is battle-tested, understands complex risk, and works very effectively not just in the U.S., but around the globe,” Gorman added.
Meanwhile, Pick’s colleague Andy Saperstein was given expanded responsibilities. He was already global head of wealth management; a business that arguably had the greatest positive impact on Morgan Stanley’s stock price in recent years.
Saperstein added the investment management division to his mandate, while the former head of that business, Dan Simkowitz, is now co-president of Morgan Stanley and head of institutional securities.
The arrangement was likely designed to retain the two men who didn’t win the CEO role. On Wall Street, succession races often end with those who don’t become CEO leaving the firm, an outcome Morgan Stanley has sought to avoid. More

In february dilro, an obscure company based in Dubai, bought the Ocean Kapal, an 18-year-old tanker. Since then the Panama-flagged vessel has been given a new name, Abundance III, and a new job. In April the ship delivered its first load of Iranian oil to the port of Dongjiakou in northern China. After completing a similar trip in September, it now lingers off Malaysia, where it may pick up yet another Iranian cargo. The ship is one of many to have recently joined the “dark fleet” tasked with moving Iranian oil, exports of which have surged from 380,000 barrels per day (b/d) in 2020 to 1.4m now (see chart).Although America retains harsh sanctions that target anyone helping to produce, ship or sell Iran’s petroleum, the superpower’s officials last year eased enforcement. They were hoping to clinch an accord on Iran’s nuclear programme—and, probably, to suppress prices in the run-up to America’s presidential election. The number of people and firms added to Iran-related blacklists by ofac, America’s enforcement agency, has dwindled.image: The EconomistYet since Hamas attacked Israel on October 7th, the Biden administration has been under pressure to close loopholes, as Iran is Hamas’s biggest sponsor and oil proceeds fill the country’s coffers. So far traders seem unfazed: oil sells at $90 a barrel, down from $97 in September. But could a sanction snapback inflame markets?Start by considering Iran’s smuggling network, which has become more sophisticated since President Donald Trump put in place fresh sanctions in late 2018. The country’s petroleum business is run by the National Iran Oil Company (nioc), a state monopoly. Its main customer is China—not the country’s large, state-owned firms, which are exposed to Western sanctions, but “teapot refineries” that snap up 95% of Iranian supplies. A glut in refining capacity is pushing these outfits to seek the cheapest crude available. Iran’s trades at a $10-12 discount to the global benchmark, against $5 for Russia’s as delivered to Chinese ports. The teapots make transactions in Chinese currency, not American dollars, which insulates them from sanctions.Old tankers, acquired by little-known middlemen, link the ends of the chain. Most would have gone to scrap because blue-chip charterers do not want them. Of the 102 extra-large tankers that have ferried Iranian oil in 2023, 42 did not do so last year and 27 have no history of ever carrying dodgy oil, according to Kpler, a ship-tracking firm. Often they do only a few voyages a year, for just a few years. But those who buy them see a return fast, because clandestine shipping commands extortionate rates.Ownership is disguised through shell companies registered in places such as China, Vietnam and the United Arab Emirates (uae). Most of those fingered by America’s Treasury department have Chinese names, suggesting beneficiaries are from the mainland. Some Chinese lenders also appear on its lists, but most are “sacrificial lambs” that exist only to import Iranian oil, says Adam Smith of Gibson Dunn, a law firm. Iran’s government offers insurance.image: The EconomistIranian barrels often begin their journey at Kharg Island, north of the Strait of Hormuz (pictured). A small but growing number also start in Jask, a new port south of the strait. This may become a preferred route, circumventing the crowded Hormuz chokepoint. Transponders are only turned on when ships go through narrow passages, says Homayoun Falakshahi of Kpler, and tankers rarely do the full journey. Some pick up fuel from other ships off the shores of Fujairah, a mega-terminal in the uae, through which a lot of disreputable petroleum, notably Russian, also passes. Many then transfer loads off the shores of Malaysia or Singapore, where smaller vessels take it to northern China—often after being mixed with other crudes from places like Venezuela or mislabelled as a different petrochemical product. There the oil is stored before being transported to its final destination, most often in the coastal province of Shandong (see map).Many American lawmakers would like their administration to disrupt this trade. New sanctions are unlikely—existing ones are already comprehensive—but Uncle Sam could dial up enforcement. Would that sink the dark fleet and its enablers?A number of challenges exist. nioc has no dealings with America or in dollars, so is resistant to pressure. Meanwhile, only China’s government can hit the teapots, and why would it bother? America would have to squeeze the middlemen. But with so many sanction programmes currently in place—they also target Russia and Venezuela—its capacity is stretched thin. Facilitators are harder to target than under President Trump, when India, South Korea and other countries sensitive to American pressure took part in the trade.Recent history suggests that companies bashed by America for flouting sanctions rapidly stop doing business, but that others emerge to fill the void. These operators would be all the less deterred given that Iran is blacklisted only by America (in contrast to Russia, whose oil g7 members have all embargoed). The Biden administration could always escalate by seizing Iranian ships en masse at sea, but that would demand huge resources, cause legal headaches and invite retaliation.Any disruption would thus probably only last for three months or so. Simulations by Rystad Energy, a consultancy, suggest there would be an initial drop of 300,000 b/d in Iranian exports. This loss—equivalent to 0.3% of global demand—could push up global oil prices by $4-5.A more extreme scenario, where rising tensions also mean that shipping is partly disrupted around Hormuz, say, and Gulf states crack down on Iranian helpers, would see another 400,000 b/d of Iranian crude vanish from the market. That would cause a bigger spike in the oil price, of perhaps 10%. But only for a moment.That is because Iran’s neighbours could ramp up production. The biggest members of opec, an oil-producing cartel, have 5.5m b/d of spare capacity. In theory, Saudi Arabia could plug the Iranian deficit without help. And opec would have a strong incentive to intervene: stratospheric oil prices would quickly destroy demand.Therefore it would take an extraordinary series of events for oil to spend much time in the triple digits. America wants to show toughness towards sanction-evaders. This month, for the first time, it singled out two tanker owners for violating Russian restrictions. It is also relaxing sanctions on Venezuela, perhaps in anticipation of a drop in Iranian exports. Yet all this activity belies a simple fact: Iran’s supply chains are supple enough to be largely immune to American measures. ■ More

When China reported faster-than-expected economic growth for the third quarter of this year, some analysts felt a twinge of concern. They worried that China’s rulers might now rest on their laurels. Rather than pressing on with efforts to revive demand, policymakers might instead wait and see if they had already done enough. The growth target for this year is, after all, only 5%. And the central government likes to keep its fiscal powder dry.This fear was allayed on October 24th when officials approved the sale of an extra 1trn-yuan ($137bn) of central-government bonds. The sale will force the central government to revise its official deficit for the year from 3% of gdp to a hefty 3.8%. As a consequence, the headline deficit in China’s year of reopening will be bigger than it was in 2020, the year of its first lockdowns.The money will be spent on helping local governments cope with natural disasters, such as recent floods. It will help relieve the strain felt by many cities and provinces. Revenues from land sales have been hit by a property slump. Off-balance-sheet debt has become harder to service, owing to a weak economy and wary investors. This year’s quota of “special” infrastructure bonds has been nearly exhausted. Help was therefore required to prevent sharp cuts in local-government outlays.But even analysts who had expected stimulus of this size were surprised. Officials could have lifted the economy by pulling less conspicuous levers. They could, for example, have allowed local governments to issue more bonds or instructed state-directed “policy banks” to expand lending. By putting the 1trn yuan on its tab, Beijing signalled its support for growth. It was a statement as well as a stimulus.The bond sale will occur under a new finance minister, Lan Fo’an, whose job was confirmed the same day. Mr Lan has served as governor of coal-rich Shanxi, but spent more time in Guangdong, a coastal powerhouse. His step up was, though, overshadowed by news that Xi Jinping had paid his first known visit to China’s central bank.What prompted the visit? It may indicate that the country’s president is paying close attention to the economy at a busy time in the policymaking calendar. Officials will soon gather for a twice-a-decade conference on China’s financial system; another, annual meeting in December will help set economic policy for next year.Mr Xi may have also wished to raise the stature of the central bank, which has recently lost some of its staff, regional branches and regulatory powers, even as it has been thrust into prominence by China’s economic struggles. It is fighting a two-front battle to prevent deflation by lowering borrowing costs, while at the same time trying to stop China’s currency, the yuan, falling too quickly against the dollar.In most countries, a president’s visit to the central bank would not excite much comment or interest. Certainly, it would not overshadow the arrival of a new finance minister. But in China, the finance minister has little clout and the president has plenty. Not much the finance minister does compels attention. Nothing the president does escapes it. ■ More

Deutsche Bank on Wednesday reported a third-quarter net profit of 1.031 billion euros ($1.06 billion), slightly beating expectations despite an 8% fall on the previous year and ongoing struggles in the lender’s investment unit.
Analysts had expected a quarterly net profit attributable to shareholders of 997 million euros, according to LSEG data.
Net profit was 35% higher on the prior quarter despite the year-on-year dip. It was Deutsche Bank’s thirteenth straight profitable quarter since its large-scale restructuring launched in 2019.

Deutsche Bank shares popped on Wednesday, after the lender slightly beat expectations with its thirteenth straight profitable quarter and said it would increase and accelerate shareholder pay-outs.
Third-quarter net profit was 1.031 billion euros ($1.06 billion), above an analyst consensus of quarterly net profit attributable to shareholders of 997 million euros, according to LSEG data.

Shares were 7% higher at 8:33 a.m. London time.
The bank’s third-quarter net profit was down 8% on the previous year and up 35% on the quarter, amid ongoing struggles in the lender’s investment unit.
For the same period in 2022, the German lender recorded a net profit of 1.115 billion euros on the back of higher interest rates and increased market volatility that boosted its fixed income and currencies trading business.
The bank said it was expecting revenues of around 29 billion euros for the full year, at the top end of prior estimates.
It also said it had scope to release up to an additional 3 billion euros in capital and would increase and accelerate shareholder distributions.

It delivered a strong performance in its corporate banking business — which benefits from the higher interest rate environment — where revenues rose 21% year-on-year to 1.89 billion euros.
However, it continued to see a slowdown in its investment arm, where net revenues fell 4% year-on-year to 2.27 billion euros and are down 12% in the first nine months of the year to 7.3 billion.
Deutsche Bank CFO James von Moltke told CNBC’s Silvia Amaro that the investment banking unit’s performance is “pretty much in line with the market” on an underlying basis.
“What’s going on is the normalization of fixed income and currency revenues that we called for, especially in the macro businesses, so rates, foreign exchange and emerging markets, which benefited last year from the very high levels of volatility,” von Moltke said.
There has been a rotation of the bank’s activity focusing onto other products, notably credit and financing, which have seen strength, he said.
Other highlights for the quarter:

Total revenues stood at 7.13 billion euros, up from 6.92 billion in the third quarter of 2022.

The provision for credit losses was 200 million euros, compared to 350 million in the same quarter of last year.
Common equity tier one CET1 capital ratio, a measure of financial resilience, was 13.9% versus 13.8% at the end of the second quarter and 13.3% in the third quarter of 2022.
Return on tangible equity stood at 7.3%, up from 5.4% the previous quarter.

Analysts at UBS said Deutsche Bank had delivered a “major improvement in capital” and “robust operational performance,” flagging that pre-tax profit of 1.723 billion euros was 9% above consensus.
Numerous challenges remain for the bank, including a weakening European business environment, macro uncertainty and IT issues at two of its retail units. More

Wall Street leaders speaking at the annual Riyadh event broadly expressed varying degrees of pessimism and caution for the coming year.
Carlyle Group CEO Harvey Schwartz stressed the presence of alpha opportunities even in the face of high interest rates and geopolitical conflict.

Several of Wall Street’s biggest names convened in Riyadh, Saudi Arabia, for the kingdom’s annual Future Investment Initiative, during which they weighed in on risks and opportunities for investors and the global economy.
Bankers speaking on panel discussions notably stressed headwinds — particularly in the short term — from multiple wars, an economic slowdown and an environment of high inflation and high fiscal deficits.

When asked about the risk outlook, Carlyle Group CEO Harvey Schwartz, former president of Goldman Sachs, advised caution but remained positive about alpha opportunities. Carlyle Group is one of the world’s largest private equity firms.
“I think this particular period, as we come out of a period of basically yield curve manipulation — which was done I think for very thoughtful reasons — but now we’re shifting out of that into a totally different regime, I think there’s reason for caution,” he said.
“But I think the year ahead will certainly present incredible alpha opportunities. But generally speaking I think we’ll have more of a headwind than a tailwind, and my own personal view is as we adjust to this rate regime, I think there are going to be more challenges in the near term. It doesn’t mean there won’t be great alpha opportunities.”
In a drive to combat the surging inflation that followed massive Covid-19 economic stimulus around the world, central banks have carried out the steepest interest rate increases in decades. Monetary policymakers have hiked rates “by about 400 basis points on average in advanced economies since late 2021, and around 650 basis points in emerging market economies,” according to the International Monetary Fund.
This dynamic increases credit risk, making it harder for people and businesses to borrow. Schwartz also highlighted the need to stay liquid in times of war to be best prepared for uncertainty.

“I think certain geopolitical risk, particularly war — again the tragedy of war and the loss of life — I think those are very difficult to price in the near term. Regardless of the conflict or where it is in the world,” he said.

“And I think you have to incorporate that into your risk assessment … if your appetite for risk is high, I think you can incorporate one way, if your appetite risk is low, then I think being much more liquid and being prepared for more uncertain outcomes, non-linear risk. You have to be prepared for those.”
In an earlier panel at the same event, JPMorgan CEO Jamie Dimon stressed the dangers of the present, particularly nuclear proliferation and war, as well as the U.S. having one of the largest peacetime fiscal deficits in its history. Bridgewater Associates founder Ray Dalio, for his part, said he was pessimistic about the global economy, pointing to war, widening wealth gaps and growing societal divides.

Schwartz, however, expressed optimism about the longer term, pointing to what he called big drivers of activity: advances in health and longevity, technology and artificial intelligence, and the energy transition.
“I think those are really significant drivers of economic activity, innovation, growth; they’re going to need lots of capital, we’ll need amazing thought leaders, we’ll need lots of global cooperation. And it’s hard not to be here today in the kingdom,” he added, “particularly this morning hearing Yasir (Al-Rumayyan, Saudi Public Investment Fund chief) speak, and not feel enthusiastic about the opportunity set.” More

JPMorgan Chase CEO Jamie Dimon on Tuesday warned about the dangers of locking in an outlook about the economy.
“Prepare for possibilities and probabilities, not calling one course of action, since I’ve never seen anyone call it,” the head of the largest U.S. bank by assets said in Saudi Arabia.
Dimon added that he doesn’t think it makes any difference whether the Fed hikes rates another quarter point.

Jamie Dimon, CEO of JPMorgan Chase speaking with CNBC’s Leslie Picker in Bozeman, MT on Aug. 2nd, 2023.

JPMorgan Chase CEO Jamie Dimon on Tuesday warned about the dangers of locking in an outlook about the economy, particularly considering the poor recent track record of central banks like the Federal Reserve.
In the latest of multiple warnings about what lies ahead from the head of the largest U.S. bank by assets, he cautioned that myriad factors playing out now make things even more difficult.

“Prepare for possibilities and probabilities, not calling one course of action, since I’ve never seen anyone call it,” Dimon said during a panel discussion at the Future Investment Initiative summit in Riyadh, Saudi Arabia.
“I want to point out the central banks 18 months ago were 100% dead wrong,” he added. “I would be quite cautious about what might happen next year.”
The comments reference back to the Fed outlook in early 2022 and for much of the previous year, when central bank officials insisted that the inflation surge would be “transitory.”
Along with the misdiagnosis on prices, Fed officials, according to projections released in March 2022, collectively saw their key interest rate rising to just 2.8% by the end of 2023 — it is now north of 5.25% — and core inflation at 2.8%, 1.1 percentage points below its current level as measured by the central bank’s preferred gauge.
Dimon criticized “this omnipotent feeling that central banks and governments can manage through all this stuff. I’m cautious.”

Much of Wall Street has been focused on whether the Fed might enact another quarter percentage point rate hike before the end of 2023. But Dimon said, “I don’t think it makes a piece of difference whether the rates go up 25 basis points or more, like zero, none, nada.”
In other recent warnings, Dimon warned of a potential scenario in which the fed funds rate could eclipse 7%. When the bank released its earnings report earlier this month, he cautioned that, “This may be the most dangerous time the world has seen in decades.”
“Whether the whole curve goes up 100 basis points, I would be prepared for it,” he added. “I don’t know if it’s going to happen, but I look at what we’re seeing today, more like the ’70s, a lot of spending, a lot of this can be wasted.” (One basis point equals 0.01%.)
Elsewhere in finance, Dimon said he supports ESG principles but criticized the government for playing “whack-a-mole” with no concerted strategy.
“You can’t build pipelines to reduce coal emissions. You can’t get the permits to build solar and wind and things like that,” he said. “So we better get our act together.”
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Millions of people pick their health insurance during open enrollment. Consumers are generally locked into their choice for a year.
Health plans come with premiums, co-insurance, deductibles, out-of-pocket maximums and other moving parts that make it tricky to choose the best insurance.
A 2017 study found that 61% of consumers inadvertently chose plans that lost them money.

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Many people will soon be picking their health insurance plans for 2024: November is a common month for workplace open enrollment, and the public marketplace opens Nov. 1.
But choosing a health plan can be tricky.

In fact, a 2017 study found many people lose money due to suboptimal choices: Sixty-one percent chose the wrong plan, costing them an average $372 a year. The paper, authored by economists at Carnegie Mellon University and the Wisconsin School of Business, examined choices made by almost 24,000 workers at a U.S. firm.
More from Personal Finance:’Cash stuffing’ may forgo ‘easiest money’ you can makeThese credit cards have had ‘increasingly notable’ high ratesHome ‘affordability is incredibly difficult,’ economist says
Health plans have many moving parts, such as premiums and deductibles. Each has financial implications for buyers.
“It is confusing, and people have no idea how much they could potentially have to pay,” Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners, based in Jacksonville, Florida, previously told CNBC. McClanahan is also a medical doctor and a member of CNBC’s FA Council.
Making a mistake can be costly; consumers are generally locked into their health insurance for a year, with limited exception.

Here’s a guide to the major cost components of health insurance and how they may affect your bill.

1. Premiums

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The premium is the sum you pay an insurer each month to participate in a health plan.
It’s perhaps the most transparent and easy-to-understand cost component of a health plan — the equivalent of a sticker price.
The average premium paid by an individual worker was $1,401 a year — or about $117 a month — in 2023, according to a survey on employer-sponsored health coverage from the Kaiser Family Foundation, a nonprofit. Families paid $6,575 a year, or $548 a month, on average.
Your monthly payment may be higher or lower depending on the type of plan you choose, the size of your employer, your geography and other factors.

Low premiums don’t necessarily translate to good value. You may be on the hook for a big bill later if you see a doctor or pay for a procedure, depending on the plan.
“When you’re shopping for health insurance, people naturally shop like they do for most products — by the price,” Karen Pollitz, co-director of KFF’s program on patient and consumer protection, previously told CNBC.
“If you’re shopping for tennis shoes or rice, you know what you’re getting” for the price, she said. “But people really should not just price shop, because health insurance is not a commodity.”
“The plans can be quite different” from each other, she added.

2. Co-pay

Luis Alvarez | Digitalvision | Getty Images

Many workers also owe a copayment — a flat dollar fee — when they visit a doctor. A “co-pay” is a form of cost-sharing with health insurers.
The average patient pays $26 for each visit to a primary-care doctor and $44 to visit a specialty care physician, according to KFF.

3. Co-insurance

Patients may owe additional cost-sharing, such as co-insurance, a percentage of health costs that the consumer shares with the insurer. This cost-sharing generally kicks in after you’ve paid your annual deductible (a concept explained more fully below).
The average co-insurance rate for consumers is 19% for primary care and 20% for specialty care, according to KFF data. The insurer would pay the other 81% and 80% of the bill, respectively.
As an example: If a specialty service costs $1,000, the average patient would pay 20% — or $200 — and the insurer would pay the remainder.
Co-pays and co-insurance may vary by service, with separate classifications for office visits, hospitalizations or prescription drugs, according to KFF. Rates and coverage may also differ for in-network and out-of-network providers.

4. Deductible

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Deductibles are another common form of cost-sharing.
This is the annual sum a consumer must pay out of pocket before the health insurer starts to pay for services.
Ninety percent of workers with single coverage have a deductible in 2023, according to KFF. Their average general annual deductible is $1,735.
The deductible meshes with other forms of cost-sharing.
Here’s an example based on a $1,000 hospital charge. A patient with a $500 deductible pays the first $500 out of pocket. This patient also has 20% co-insurance, and therefore pays another $100 (or, 20% of the remaining $500 tab). This person would pay a total $600 out of pocket for this hospital visit.

When you’re shopping for health insurance, people naturally shop like they do for most products — by the price.

Karen Pollitz
co-director of the program on patient and consumer protections at the Kaiser Family Foundation

Health plans may have more than one deductible — perhaps one for general medical care and another for pharmacy benefits, for example, Pollitz said.
Family plans may also assess deductibles in two ways: by combining the aggregate annual out-of-pocket costs of all family members, and/or by subjecting each family member to a separate annual deductible before the plan covers costs for that member.
The average deductible can vary widely by plan type: $1,281 in a preferred provider organization (PPO) plan; $1,200 in a health maintenance organization (HMO) plan; $1,783 in a point of service (POS) plan; and $2,611 in a high-deductible health plan, according to KFF data on single coverage. (Details of plan types are outlined below.)

5. Out-of-pocket maximum

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Most people also have an out-of-pocket maximum.
This is a limit on the total cost-sharing consumers pay during the year — including co-pays, co-insurance and deductibles.
After you’ve paid the out-of-pocket maximum amount for the year, “the insurer can’t ask you for a co-pay at the doctor or pharmacy, or hit you for more deductibles,” Pollitz said. “That’s it; you’ve given your pound of flesh.”
About 99% of workers with single coverage are in a plan with an out-of-pocket maximum in 2023, according to KFF.
The range can be large. For example, 13% of workers with single coverage have an out-of-pocket maximum of less than $2,000, but 21% have one of $6,000 or more, according to KFF data.
Out-of-pocket maximums for health plans purchased through an Affordable Care Act marketplace can’t exceed $9,100 for individuals or $18,200 for a family in 2023.

6. Network

Health insurers treat services and costs differently based on their network.
“In network” refers to doctors and other health providers who are part of an insurer’s preferred network. Insurers sign contracts and negotiate prices with these in-network providers. This isn’t the case for “out-of-network” providers.
Here’s why that matters: Deductibles and out-of-pocket maximums are much higher when consumers seek care outside their insurer’s network — generally about double the in-network amount, McClanahan said.
Further, there’s sometimes no cap at all on annual costs for out-of-network care.
“Health insurance really is all about the network,” Pollitz said.
“Your financial liability for going out of network can be really quite dramatic,” she added. “It can expose you to some serious medical bills.”

Some categories of plans disallow coverage for out-of-network services, with limited exception.
For example, HMO plans are among the cheapest types of insurance, according to Aetna. Among the tradeoffs: The plans require consumers to pick in-network doctors and require referrals from a primary care physician before seeing a specialist.
Similarly, EPO plans also require in-network services for insurance coverage, but generally come with more choice than HMOs.
POS plans require referrals for a specialist visit but allow for some out-of-network coverage. PPO plans generally carry higher premiums but have more flexibility, allowing for out-of-network and specialist visits without a referral.  
“Cheaper plans have skinnier networks,” McClanahan said. “If you don’t like the doctors, you may not get a good choice and have to go out of network.”

How to bundle it all together

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Budget is among the most important considerations, Winnie Sun, co-founder and managing director of Sun Group Wealth Partners in Irvine, California, previously told CNBC. She’s also a member of CNBC’s FA Council.
For example, would you struggle to pay a $1,000 medical bill if you require health care? If so, a health plan with a larger monthly premium and a smaller deductible may be your best bet, Sun said.
Similarly, older Americans or those who require a lot of health care each year — or who expect to have a costly procedure in the coming year — may do well to pick a plan with a bigger monthly premium but better cost-sharing.
Healthy people who generally don’t max out their health spending every year may find it cheaper overall to have a high-deductible plan, McClanahan said.

Cheaper plans have skinnier networks. If you don’t like the doctors, you may not get a good choice and have to go out of network.

Carolyn McClanahan
certified financial planner and founder of Life Planning Partners

Consumers who enroll in a high-deductible plan should use their monthly savings on premiums to fund a health savings account, advisors said. HSAs are available to consumers who enroll in a high-deductible plan.
“Understand the first dollars and the potential last dollars when picking your insurance,” McClanahan said, referring to upfront premiums and back-end cost-sharing.
Every health plan has a summary of benefits and coverage, or SBC, which presents key cost-sharing information and plan details uniformly across all health insurance, Pollitz said.
“I’d urge people to spend a little time with the SBC,” she said. “Don’t wait until an hour before the deadline to take a look. The stakes are high.”
Further, if you’re currently using a doctor or network of providers you like, ensure those providers are covered under your new insurance plan if you intend to switch, McClanahan said. You can consult an insurer’s in-network online directory or call your doctor or provider to ask if they accept your new insurance.
The same rationale goes for prescription drugs, Sun said: Would the cost of your current prescriptions change under a new health plan? More