Plan Costs

"Premium is the amount paid for your health insurance every month. In addition to your premium, you usually have to pay other costs for your health care, including a deductible, copayments, and coinsurance. Deductible is the amount you pay for covered health care services before your insurance plan starts to pay. With a $2,000 deductible, for example, you pay the first $2,000 of covered services yourself. Many health insurance plans cover certain services such as check-ups, disease management, and preventive services before the deductible has been met. Family plans often have both an individual deductible, which applies to each person, and a family deductible, which applies to all family members. Generally, plans with lower monthly premiums have higher deductibles. Plans with high monthly premiums usually have lower deductibles. Those who use their health insurance often would probably be wise to choose a plan with a slightly higher premium but a lower deductible, which may save money in the long-term. After paying the deductible, you will usually pay only a copayment or coinsurance for covered services. Your insurance company pays the rest. Copayment is a fixed amount, $20, for example, you pay for a covered health care service after you've paid your deductible. Let's say your health insurance plan's allowable cost for a doctor's office visit is $100. Your copayment for a doctor visit is $20. If you've paid your deductible, you pay $20, usually at the time of the visit. If you haven't met your deductible, you pay $100, the full allowable amount for the visit. Copayments, sometimes called copays, can vary for different services within the same plan, like drugs, lab tests, and visits to specialists. Coinsurance is the percentage of costs of a covered health care service you pay, 20%, for example, after you've paid your deductible. Let's say your health insurance plan's allowed amount for an office visit is $100 and your coinsurance is 20%. If you've paid your deductible, you pay 20% of $100, or $20. The insurance company pays the rest. If you haven't met your deductible, you pay the full allowed amount, $100."