Knowing the most thorough and cost-effective coverage option for your family can be difficult but important. Avoid getting caught short in times of medical need.
There are several ways in which an insurer collects money:
- Premium: For any insurer, either you or your employer will pay a monthly premium.
- Deductible or excess: This refers to an amount up to which the insurer will not pay. For example, on a policy with a $2,000 deductible, you will fund the first $2,000 of treatment costs. The benefits of your policy become active after the first $2,000 of costs. A deductible can apply to an individual or a whole family.
- Co-payment: The insured pays a fixed amount for each instance of a covers type of treatment. A visit to a primary care physician, for example, may have a co-payment of $20. A policyholder would have to pay the co-payment at the clinic. Alternatively, the clinic deducts the co-payment from the completion of any claim made for the visit.
- Co-insurance: This is similar to a co-payment but works as a percentage of costs rather than a fixed amount. As an example, a person may have a 20 percent co-insurance on physical therapy appointments. The insurance company would, therefore, pay 80 percent of treatment costs.
- Out-of-pocket maximum: On some policies, once the insured has paid out a certain amount in expenses within a single membership year, a certain deductible or co-insurance may no longer apply.
Deductibles, co-insurances, and co-payments can be used to make sure that people on an insurance policy only receive treatment within the approved network. For example, the insured may be charged a 20 percent co-insurance for treatment at an in-network facility but 50 percent for treatment at a facility outside of the network.
Depending on your situation, you can also moderate the cost of the monthly premium by choosing a higher deductible. If you have a low income at present, this may be the best way to save money on regular insurance costs. However, it does mean that, in cases of emergency treatment, you will have more to pay on the day.
Extra costs can emerge when you meet or exceed the annual limit for a benefit. Some treatments may be covered in full, or without any limit on how much of one type of treatment a person receives in a year.
However, a person may also have a lifetime limit, meaning that after the policyholder reaches this amount, they can no longer receive funding from this policy. Look for a lifetime limit of at least $2 million.
According to an eHealthInsurance survey from 2013, the average monthly premiums among its customers were $279 per month for an individual, with an average deductible of $2,257. Family plans cost an average $605 per month with a $3,422 deductible.
Health insurance premium costs rose by 113 percent in the U.S. from 2001 to 2011. Between 2010 and 2011, a Kaiser Survey showed that the number of people with health insurance dropped by about 20 million.
To cope with rapidly rising premium costs, millions of people opt for larger deductibles.
An insurance broker or intermediary can help you better understand your coverage needs and buy a policy that matches them.
With all of these options available, it can seem overwhelming to choose a policy that is right for you and your family.
When coverage is available through an employer, it can be a great way to access an often-enhanced set of benefits at a reduced cost. However, not all employers offer health insurance as a perk.
There are some important factors to bear in mind when choosing a policy. These include:
- whether to collect all members the family onto one plan or have each member on a separate plan
- your current doctor being in the network for a particular insurer
- making sure the options you choose in the policy are right for your health needs
- the size of your deductible and whether you would prefer to pay more as a regular premium or more when treatment is necessary
- the amount of time spent outside the country – if you travel for many months of the year, you may benefit from a policy that covers more than just your country of residence
You may wish to get an insurance policy through a broker or intermediary. While their services may cost a little extra on top of your premium, they can provide a clearer breakdown of the available options and how they will impact you and your family and make sure you get the fairest deal.
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