Have you ever taken a moment to have someone explain health insurance costs to you? We know that health insurance costs just keep going up and up, but how do these spiraling costs affect your health insurance coverage? You know the amount you're paying every month for your health insurance premium, so it's easy to know when this cost increases, but what about all the other costs involved with health insurance? Do you know what they mean? Before you're hit with an excessively large medical bill, read the following explanation of health insurance costs.
Premium
The premium is the amount you'll pay for the benefits covered under your health insurance plan. The premium is typically broken down into equal monthly payments. If you've got group insurance, your employer or a union is probably sharing some percentage of this cost.
The Deductible
If your health insurance policy includes an annual deductible, it's important to understand the details. A deductible is an amount that you are responsible for paying before the insurance company begins paying out claims. As with car insurance, the higher your deductible the lower your monthly premium and vice versa. A family health insurance plan typically includes multiple deductibles.
The Co-Payment
A co-payment is a fixed amount that the insured has to pay each time they visit the doctor. The co-payment amount differs based on the type of health insurance plan you have and typically an HMO will have the lowest co-payment. The co-payment can however, increase for different types of medical service and/or if you go outside the network.
Co-Insurance
Co-Insurance is the amount of a claim that the insured is responsible for paying, once the deductible has been met. A typical ratio is 80/20 where the insurance company pays 80% of a claim and the insured pays 20%. An insured's percentage will typically increase when he goes outside the network. Also, in situations where the claim exceeds what the insurance company deems 'reasonable and customary' the difference is another form of co-insurance that must be paid by the insured.
If you don't fully understand these health insurance costs have someone explain them to you. These are the things you've got to ask about when requesting quotes, especially online health insurance quotes. When you're comparing quotes from different insurance companies, it's important to know all your costs, not just the premium. Make sure the person preparing your quote clearly defines the deductible amount and whether there is a separate deductible for different types of services, the co-payment amount and the co-insurance amounts. Also ask the person to elaborate on other costs that may not be readily apparent.
To keep costs as low as possible, always stay within your network. If you can choose any medical care professional, be sure that the fees for the services you'll need fall within your insurance company's 'reasonable and customary' guidelines. If not, shop around for a less expensive provider. Other tips for keeping health insurance costs as low as possible include living a healthier lifestyle and seeking medical care only when absolutely necessary. |
