Health insurance premiums depend heavily on where you live, your age and family size. Being aware of how these cost factors impact coverage decisions is an invaluable way of making wiser choices.
Individual health plans purchased via eHealth without subsidies cost an average of $274 monthly in 2014. That figure increased significantly when expanded to family plans; it stood at $663.
Premiums
Premiums for health insurance are monthly fees paid to an insurer in exchange for coverage. They vary according to plan, though typically there is an association between premium and scope of coverage.
Premium payments for an insured are often deducted directly from their paycheck, though employers often cover some or all of the policy premiums of employees and their family members.
Insurers employ actuarial tables to estimate the costs of policies. They take into account factors like age, geographic location, amount of coverage being purchased and whether there are preexisting conditions that need coverage as well as any risks involved with offering specific types of insurance policies.
Deductibles
Deductibles are the amount you must pay before your insurance starts covering medical costs; typically between $1,000 and $2,000.
Health insurance deductibles provide health insurers with a way of controlling claims-related risks and lowering premiums while also helping people understand the out-of-pocket expenses related to healthcare costs.
Deductibles can be an unexpected financial strain if you visit the doctor or emergency room frequently throughout the year. Supplemental health insurance may help alleviate some of this financial pressure.
Deductibles vary by insurer and plan type; you should take careful consideration in choosing your health insurance plan based on these elements.
Copays
Copays are fixed payments you make for health services covered under your plan, such as doctor’s visits or prescription drugs. They usually range between $50-100 but could vary based on your treatment and plan type.
Your insurance provider may require copayments when you visit out-of-network doctors and hospitals, with costs typically being higher than for in-network visits and not applied towards your deductible.
As part of your health insurance coverage, in 2021 you’ll also have an out-of-pocket maximum limit; this limit represents the maximum you will spend before it is covered by your plan. Although its exact amount cannot exceed certain levels, depending on which health plan is in force at that time.
Coinsurance
Coinsurance refers to the percentage of an out-of-pocket medical service payment you must cover after meeting your deductible, typically determined as either 80/20 or 70/30 coinsurance ratios.
A deductible is the fixed sum you must pay before health insurance coverage commences. Once this deductible has been reached, health insurance will pay part of the costs related to certain services such as prescription medication and preventative healthcare.
Copayments may also apply when receiving healthcare services such as a doctor visit or surgical procedure; however, these copayments should typically not exceed your out-of-pocket maximum on your plan.
Coinsurance is an integral part of many health insurance plans. Similar to copays and deductibles, it entails certain costs you must cover for covered medical services; however, it may be harder to understand. When selecting your plan it is not always wise to opt for one with high coinsurance as this may make budgeting your healthcare expenses more complicated.
