Balancing what you can afford and the health insurance coverage you need is the key to finding the right plan. To help you in your decision making process, here’s a look at the basics of health insurance costs and coverage.
Cost is more than what you pay every month for your health insurance. Factors that make up the cost of insurance include the following:
Deductible – The amount you’re responsible for paying for covered medical expenses before your health plan begins to pay each year.
For example, say you get into a car accident and your hospital bill is $10,000, while your deductible is $2,000. That means you have to pay $2,000, while your insurance company pays the remaining $8,000.
Copay – These are set prices for some services. For example, a plan may require a $10 copay for a visit to your primary care physician and a $20 copy to see a specialist. Not all plans have copays.
Coinsurance – These are the shared costs between you and your health plan. For instance, you may be required to pay 20% of your covered medical costs and your plan pays 80%. Not all health insurance plans have coinsurance.
Premium – The amount you pay for an insurance policy. All of the above factors along with your coverage impact how high or low your monthly cost will be.
So, your premium + the deductible + copayments + coinsurance = the most you will pay for healthcare each year (for covered services). Here’s an example:
How it Works:
You’ve probably heard the terms “in-network” and “out-of-network.” But what do these really mean? And how do they impact you?
A network is a large group of healthcare providers, doctors, hospitals, pharmacies, etc. And instead of charging you regular rates, they’ll charge you lower fees that have been negotiated by your insurance company.
How this impacts you: Make sure your doctors (primary care and specialists) are in-network. This way, you will be charged the discounted rate.
With out-of-network providers, your insurance company doesn’t have a discounted rate. So those doctors, specialists and facilities can charge any amount.
How this impacts you: You will likely pay higher out-of-pocket costs to see out-of-network providers.
Services not covered are those that your insurance plan will not pay for in any way. So you will be required to bear 100% of the cost.
How this impacts you: Before purchasing a plan, check for services that are not covered. So, for instance, if you are planning a family and maternity care is not covered in your plan, it can mean a higher cost for you.
Some services, such as preventive ser vices, are covered in full by health insurance plans.
How this impacts you: Check for discounts, free services and tools your insurance plan comes so you can save money and achieve your health and wellness goals.
There are many steps you can take to lower the cost of health insurance, including: