Cost should always be an important consideration when shopping for health insurance, and online marketplaces provide an efficient way of comparing costs and coverage. Before making your choice, request a summary of benefits and provider directories as they will help guide your decision-making.
HMOs often restrict access to specialists through referrals from primary doctors; while point of sale plans tend to offer more diverse choices of providers.
Premiums
Premiums are monthly payments that individuals make to maintain active health insurance coverage, whether directly to the insurer or via payroll deduction from an employer’s payroll system.
Premium costs can vary significantly between plans. Affecting factors include state and federal laws, type of insurance purchased through either employers or marketplace.
Other factors that can impact premium costs include health status and age as well as tobacco use. Plans with more comprehensive benefits typically have higher premiums. Furthermore, certain areas and types of coverage – like preferred provider organization (PPO) and health maintenance organization (HMO) plans – tend to incur more costly premiums.
Deductibles
A deductible is the portion of health care services you must cover before your health insurance begins to reimburse for them. It stands in contrast to copayments or coinsurance payments that are fixed amounts (like $10 for doctor visits) or percentages ( like 30% of hospital costs).
Many health insurance plans provide the option of selecting different deductibles, giving you greater control over how you spend money each month. A higher deductible could potentially help lower your monthly premium and save money over time, though before making your choice you should carefully evaluate all aspects of plan cost such as the deductible and out-of-pocket maximum before making a final decision. Also remember that opening an HSA may help with paying for a high deductible plan – for more information check out our HSA Guide.
Copays
Copayments are fixed fees required of patients by health insurance providers for office visits and prescription drugs, part of an industry practice designed to keep premiums down and medical costs under control.
Health plans often offer various copayments for services and medications, for instance a plan might have a $10 copayment for generic drugs and $25 for preferred brand-name ones; additionally some plans offer flat copayments for out-of-network visits.
Copays, coinsurance and deductibles should all be carefully considered when comparing health care plans. Furthermore, some services do not incur cost sharing, including annual preventive health checkups and certain vaccinations.
Coinsurance
Coinsurance is a cost-sharing arrangement wherein an insurer pays a portion of your allowable costs after your deductible has been met, such as office visits, special procedures or medications. Coinsurance applies to office visits, special procedures or medications.
Insurers typically pay providers in their network the “usual, customary, and reasonable” (UCR) price for services; should you choose one outside their network instead, your out-of-pocket cost will increase accordingly.
Some plans offer tiered networks with lower monthly premiums in exchange for higher deductible and coinsurance expenses, often known as high-deductible health plans (HDHPs). Federal law, however, limits annual out-of-pocket costs for marketplace health plan deductibles and coinsurance costs in order to protect consumers from unexpectedly large medical bills.
Out-of-pocket expenses
Out-of-pocket costs refer to any health care services used by households which aren’t reimbursed by their insurance plan, such as deductibles, copayments and coinsurance premiums. Uninsured families tend to spend more on health care due to these outlays.
Out-of-pocket expenses depend on the type of health insurance policy you select. HMOs tend to offer lower premiums but don’t permit out-of-network coverage and require primary care provider referrals when seeing specialists; PPOs and EPOs usually offer greater flexibility for out-of-network care, though their costs tend to be higher overall. Some plans even feature annual maximum out-of-pocket spending limits which help limit out-of-pocket spending while saving money over time.
