The Real Cost of Health Insurance
Do you know the actual cost of your health insurance? It's common knowledge that health insurance costs are continually rising, but how do these spiraling costs affect your health insurance coverage? You know how much you pay every month for your health insurance premium, so it's easy to know when this cost goes up. But what about all the other costs involved with health insurance? Do you know what they are and how they work? Before you're hit with an unexpectedly large medical bill, find out about the hidden costs of your health insurance. The Premium The premium is the amount you'll pay for the benefits covered under your health insurance plan. The premium is typically broken down into equal monthly payments. If you've got group insurance, your employer or union is probably sharing some percentage of this cost. The Deductible If your health insurance policy includes an annual deductible, it's important to understand the details. A deductible is an amount you are responsible for paying before the insurance company begins paying out claims. As with car insurance, the higher your deductible, the lower your monthly premium and vice versa. A family health insurance plan typically includes multiple deductibles, one for each family member. The Co-Payment A co-payment is a fixed amount you have to pay each time you visit the doctor. The co-payment amount will depend on the type of health plan you have. Typically, an HMO will have the lowest co-payment. The co-payment can increase, however, for different types of medical service and/or if you choose a doctor or hospital outside the network. Co-Insurance Co-Insurance is the amount of a claim that the insured is responsible for paying, once the deductible has been met. A typical ratio is 80/20, where the insurance company pays 80% of a claim and the insured pays 20%. An insured's percentage will usually increase when he or she goes outside the network. Also, in situations where the claim exceeds what the insurance company deems "reasonable and customary," the difference is another form of co-insurance that you must pay. Comparing Quotes If you don't fully understand these health insurance costs, have someone explain them to you. These are the things you need to ask about when requesting quotes, especially online health insurance quotes. When you're comparing quotes from different insurance companies, it's important to know all your costs, not just the premium. Make sure the person preparing your quote clearly defines the deductible amount and whether there are separate deductibles for different types of services, the co-payment amount and the co-insurance amounts. Also, ask the person to elaborate on any other costs that may not be readily apparent. Holding Down Your Costs There are a number of ways you can help control costs once you have selected a health insurance plan. If yours is a "managed care plan," be sure to stay within your network. If you can choose any medical care professional, be sure that the provider's fees for the services you'll need fall within your insurance company's "reasonable and customary" guidelines. If not, shop around for a less expensive provider. Other tips for keeping health insurance costs at a minimum include living a healthier lifestyle and seeking medical care only when absolutely necessary. Beyond these, the increases in health care costs are largely beyond the individual's control. The best medical advice would be, don't get an ulcer worrying about them. |