By law, almost everyone must have health insurance or a pay a fee.
The question is how to structure your investment in health insurance and medical care so that you save the most money. To do this, you need to know the different types of health insurance costs involved.
Premiums, deductibles, copayments, coinsurance and out-of-pocket costs of health insurance are important to understand before choosing a health plan.
- Premium – The amount that you pay every month to have health insurance coverage. Most people look for a low health insurance premium, but this is only one cost to consider. Usually if the premium is low, the other costs are not.
- Out-of-Pocket Costs (OOPs) – Your expenses for medical care that aren't reimbursed by insurance. Out-of-pocket costs include deductibles, coinsurance, and copayments for covered services plus all costs for services that aren't covered.
- Deductible – The amount you owe for health care services before your health plan begins to pay. For example, if your deductible is $1,000, your insurance won’t pay anything until you’ve met your $1,000 deductible for covered health care services subject to the deductible. The deductible may not apply to all services, which is a point to review when looking for the right health insurance plan.
- Copayment (or Copay) – A fixed amount (for example, $15) you pay for a covered health care service, usually when you get the service. The amount can vary by the type of covered health care service. For example, if you have a family that goes to the doctor a lot, looking for a plan with a low copay (which can mean a higher premium) might be the cheaper option.
- Coinsurance – Your share of the costs of a covered health care service, calculated as a percent (for example, 20%) of the allowed amount for the service. You pay coinsurance plus any deductibles you owe. A more affordable choice for you might be a plan with a low coinsurance, depending on how often you go to the doctor.
All this means that when looking for medical insurance, go “OOPs!” before you make a decision based on the cost of premiums. A good rule of thumb is the higher the premium, the lower the out-of-pocket (OOP) health insurance costs.
Get a Quote with Unity today to find out which plan is the right health insurance option for you!