Medical Insurance program costs can be a little bit complicated if you are not familiar with them and a lot of people are surprised that, having paid what they consider to be an enormous premium, they then get stuck with a bill the first time they try to make a claim. So, before you are hit with a large medical bill, it is worth just taking a moment to understand what sort of costs you can expect to incur on your health care insurance policy.
Premium. The first and most obvious cost is the plan premium which is the amount you’ll pay monthly (or occasionally quarterly or annually) for the benefits covered under your health care insurance plan. If you are a member of a group insurance program arranged by your employer or a union then you’ll generally only be required to meet a percentage of the premium.
The Deductible. Most health care insurance programs will includes an annual deductible and it is very important that you understand the details of any deductible applied to your policy. A deductible is a sum of money that you’ll have to find yourself before the insurance carrier begins paying out on any claims. In other words, if your annual deductible is $1,000 then you’ll need to pay the first $1,000 in medical bills each year before the insurance carrier will start paying out. As with other forms of insurance, such as automoblie insurance, the higher the deductible on your policy the reduce your premiums will be. A family health care insurance program will typically include multiple deductibles for the various members covered under the plan.
The Co-Payment. A co-pay is a fixed sum of money that you’ll have to pay on each medical bill. The amount of the co-pay differs according to the type of health care insurance program you have and is typically reduce on an Health Maintenance Organization (HMO) plan than it is on an indemnity plan. The co-pay can also vary for different kinds of medical service and, if you are a member of an Health Maintenance Organization (HMO) plan, will generally increase if you seek treatment outside of the Health Maintenance Organization (HMO) network.
Coinsurance . Coinsurance is the sum of money, expressed at a percentage, that you’ll be responsible for paying on each medical bill. A common policy ratio is 80/20 which means that the insurance carrier will pay 80% of a claim and you’ll pay 20%. This percentage will often increase if you are a member of an Health Maintenance Organization (HMO) plan and go outside of the Health Maintenance Organization (HMO)’s network. Additionally, where a claim exceeds what the insurance carrier considers to be “reasonable and customary” for the treatment undertaken you may be required to meet the additional cost.
As you can see comparing health care insurance programs is about much more than comparing premiums and it is vitally important whenever you request a quote, particularly if you are asking for a quote online, that you fully understand the range of costs involved.
To keep costs low in an Health Maintenance Organization (HMO) plan always try to stay within the Health Maintenance Organization (HMO)’s network and, if you go outside the network, then be careful to compare the actual cost of treatment against what the insurance carrier considers “reasonable and customary” before undergoing treatment. You are able to also control costs by increasing or lowering the deductible on a lot of policies and by picking higher or reduce co-insurance. Be careful though to balance these against the likelihood that you’ll need to claim on the policy.
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