Health insurance refers to any system designed to cover medical expenses, whether that’s through employers, private insurers or government programs such as Medicare and Medicaid.
When selecting an insurance plan, it is essential to keep both monthly premium costs and care expenses in mind when making your selection. Furthermore, keep in mind that not all plans provide equal coverage.
Premiums
A monthly premium is the amount you pay an insurance company in order to maintain health plan coverage, and one part of your total health care costs, which also include deductibles and copayments made when using health services. Premiums tend to be lower among plans with increased competition as insurers have an incentive to maintain low premiums so as to attract enrollees; to reduce spending they also negotiate reduced hospital and physician payment rates as well as exclude high-cost providers from their networks while monitoring enrollee use more closely.
Your level of coverage, health status and geographic location all factor into how much your premiums cost each month. Marketplace enrollees often qualify for premium subsidies to reduce out-of-pocket expenses while individually purchased health plans outside the marketplace can vary significantly in cost and may often cost more.
Deductibles
Health insurance can be confusing. One such term is deductibles – the amount you owe for healthcare before insurance will start covering it.
Deductibles differ from copays and coinsurance payments that you must make when accessing healthcare services, and a monthly premium payment that must be made to maintain health insurance coverage.
Your deductible amount depends on which plan you select, and can either be an individual or family deductible. With an individual deductible plan, each time healthcare services covered by your insurance are received the payment counts towards meeting it; while with family deductible plans all payments made collectively towards meeting it. Once met, coinsurance begins sharing costs between you and your plan.
Co-pays
Co-pays are an integral component of health insurance plans. Co-pays are set fees for medical visits, prescription drugs and other covered expenses that don’t count towards your annual deductible and can vary widely between healthcare providers. Leon, 34-year-old forklift operator has $30 copays when visiting his primary care physician and $50 for specialty doctors as well as $10 for generic drugs.
While these costs can quickly add up, they serve a vital function: keeping premiums affordable for policyholders. By understanding how they operate, you can select an insurance plan which meets both your needs and budget requirements.
Coverage
Health insurance provides financial assistance to cover medical costs and certain preventive services. In addition, it can offer income benefits should an illness or injury result in missed work days.
United States residents have access to numerous types of health insurance plans. Coverage may come through their employer, private insurers, federal or state exchanges or public programs like Medicare, TRICARE and Medicaid.
HMOs and PPOs generally require that individuals choose a primary care doctor who will coordinate all of their healthcare needs, while restricting which providers, doctors, hospitals and specialists will be covered; exceptions may be made in case of emergencies. Health insurers will generally pay out-of-network providers using “usual and customary” charges – often lower than actual charges from providers; as an incentive, however, insurers often offer discounts to encourage patients to use providers within their network – this benefit is known as an “in-network benefit”.