Health insurance costs depend on a range of variables, including state and federal regulations, the size of your employer, and whether or not it’s purchased through a marketplace or directly through them.
There is also a range of plans, such as Catastrophic, Bronze, Silver and Gold options. Each has their own premiums and out-of-pocket expenses.
Premiums
No matter whether or not your health insurance is provided through work or purchased independently, premiums will always play a pivotal role in its cost. They represent monthly payments you make to keep the policy active – no matter how often or little use there may be of it. Various factors impact premium costs including age, location and coverage type.
Premiums can be an expensive burden, particularly for older Americans and those diagnosed with illness. But there are ways you can reduce costs; such as selecting a plan with a higher deductible or using health care less frequently.
Shopping around can help reduce premiums by finding the best rate. There are many websites offering free comparison of plans and prices, plus information about state/federal regulations which influence insurance prices.
Co-pays
Copays are fixed amounts that you pay when receiving medical services and treatments, usually after meeting the deductible amount for that service or drug. They often come out cheaper than deductibles and can help when comparing various health insurance plans.
A $20 copay for a visit to your physician won’t count towards meeting your deductible; however, paying more for urgent care visits would count.
Before enrolling in any health insurance plan, it is important to understand all its associated costs. These costs can include monthly premiums, deductibles and copayments in addition to out-of-pocket maximums as well as preventive care coverage that must be fully provided under most plans. In general, plans with higher monthly premiums will have higher copayments and coinsurance; however some preventive care services may not require copayment at all.
Deductibles
Deductibles are the amount you owe toward medical care before your insurance kicks in, and vary by plan and individual or family status. For instance, if your plan requires that an individual pay an individual $1,000 deductible before any services become covered under your plan – for instance if an office visit costs $100 but your deductible is $1,000 then once met all costs will be shared evenly among both entities involved – no exceptions.
In general, higher deductibles typically translate to reduced monthly premiums; however, be mindful of your health needs and budget when selecting plans with higher deductibles. If you only rarely visit your doctor or take prescription drugs, plans with lower deductibles may be more suitable; you can see cost sharing details in its Explanation of Benefits (EOB).
Maximum out-of-pocket costs
When shopping for health insurance, it’s essential to consider your maximum out-of-pocket (out-of-network) costs. This figure represents how much of an out-of-pocket expenditure must be met before insurance can cover all of your expenses, such as your deductible payment and copay/coinsurance for in-network services; it does not include monthly premium payments or services not covered by your plan.
The maximum out-of-pocket limit changes every year according to federal regulations, for instance the Affordable Care Act’s maximum OOP limit increased 43% from $6,350 in 2014 to $9,100 by 2023 for other non-grandfathered private plans and HSA-qualified high deductible health plans (HDHPs).
Other variables that could impact how much out of pocket expenses you incur include health plan benefit design, metal categories for qualified ACA plans, flexible spending account options and deductibles. Health maintenance organization (HMO) and exclusive provider organization (EPO) plans tend to have lower deductibles than PPO plans.
