Cost Variables For Choosing Health Insurance
Updated: Feb 18, 2019
When shopping for Health insurance, look for more than the lowest premium. It is important to view health insurance options from the perspective of the total spend. That is, what are your total costs for the health care services and products you use? Let's look at some key variables when making a decision about health insurance.
Monthly Premium - Higher premiums generally come with lower out of pocket costs when you do need medical care. If you think your expenses will reach the amount of the deductible, a higher premium can translate to lower total costs for the year.
Deductibles- Higher deductibles generally mean lower premiums. If you are generally healthy and don't expect to many doctor visits during the year, a high deductible provides protection against serious health issues that could arise. But, your out-of-pocket costs will be higher when you need care.
Out of Pocket Maximum- The most you must pay during the plan year for out of pocket costs not counting the monthly premium. This includes deductibles, coinsurance amounts, and copays.
Co-Insurance- This is a the percentage of costs you pay after a deductible and co-pay. As with deductibles, lower co-insurance rates may be a better choice if you expect to make extensive use of the policy benefits.
Co-Pays- This is an amount (typically $15 to $35) that is paid to a care provider at the time of services are received. You only pay this amount whether or not you have met the deductible. A few Co-Pays in a lower premium plan can help with things like doctor or urgent visits, as well as medications.
When shopping for health insurance, do not stop your inquiry at the monthly premium. Think about how and how often you use healthcare services and then consider whether, for example, a higher premium may actually result in overall less out-of-pocket expenses given your own situation.