How To Guide For: Understanding The Difference Between Health Insurance Deductibles--Premiums---Copa
In health insurance, a deductible is the amount that a policyholder must pay toward their medical expenses before the insurance company begins to pay its share. The purpose of the deductible is to help keep premiums low through cost-sharing and by reducing the number of small claims and unnecessary doctor visits. If you'd like to save money on your premium and you're in good health, you may want to consider a plan with a higher deductible. That's because plans with high deductibles generally have lower premiums. Conversely, plans with low deductibles have higher premiums. Deductibles may vary depending on whether medical services are received in or out-of-network. A Premium is the amount you pay for your health insurance every month or in quarterly installments. A Copay is the flat fee you pay for certain medical expenses. The health insurance company reimburses the doctor and the pharmacy for the difference between the copay and the cost of treatment. In general, if you pay a copay for a service or prescription drug, you do not also pay toward your deductible. Coinsurance is a health care cost sharing between you and your insurance company. The cost sharing ranges from 80/20 to even 50/50. The cost sharing stops when medical expenses reach your out-of-pocket maximum. If your medical expenses in a calendar year excess out-of-pocket limit, then your insurer covers all the remaining costs. Out-of-Pocket Limit (also known as Out-Of-Pocket Maximum) is the maximum amount of money you may pay for medical services in a calendar year. This amount includes money you spend on deductibles, copays and coinsurance. Once you hit your out-of-pocket maximum, your insurance plan will pay your covered health care and prescription costs for the rest of the year. Choosing a medical plan that fits your needs and budget is based mostly on balance between deductible, coinsurance, and out-of-pocket limit. All of the three affect your health insurance premium. In general the higher they are the less expensive your health insurance is. To get more in depth information on health insurance Deductibles, Premiums, Coinsurance and Out-of-Pocket limit click the pictures below to read the articles.
