Navigating the complexities of health insurance can be overwhelming. To make sure you’re getting the coverage you need, it’s important to understand the terminology associated with your policy. In this blog, we’ll familiarize you with the four most common health insurance terms so you can understand the policy details and make sure you’re adequately protected.
Your premium is the amount you pay monthly to your insurer for your health insurance coverage. Premium rates typically vary depending on the type of plan you choose, the age of the policyholder, and the coverage limit. However, fewer premiums do not always mean fewer costs as they include higher deductibles or copays leading to an increase in your out-of-pocket expenses.
Your deductible is the amount you must pay out-of-pocket before your insurance kicks in and starts covering the costs of your medical care. Your deductible is typically an annual amount, so you’ll need to pay the full amount each year before your insurer will start to cover your medical expenses. The amount of your deductible can vary depending on the type of plan you choose. Generally, the higher your deductible, the lower your premiums will be. This is because a higher deductible means you’ll be paying a larger portion of your healthcare costs from your own pocket.
Coinsurance is the amount you’ll pay for healthcare services after you’ve met your deductible. Coinsurance is typically a percentage of the total cost of care, so the more expensive the service, the more you’ll pay. For example, if your plan has a 20% coinsurance, you’ll pay 20% of the total cost of care after you’ve met your deductible.
A copayment, or copay, is a fixed amount you’ll pay for a healthcare service. Copays are typically a fraction of the total cost of care, so you’ll pay a set amount for each visit or prescription. Copays can vary depending on the type of service you’re receiving and the type of plan you have.
Learn More About Your Health Insurance with Steve Wilk Insurance
Understanding frequently-used terms in health insurance policies can help you select the right coverage for yourself and your loved ones at an affordable price. For more information on health insurance coverage, contact our team at Steve Wilk Insurance today. We will help you find the best plan based on your unique needs and budget.