The Cost of Health Insurance
Here's the big question: How much does all this health insurance stuff cost? It depends on your plan's premiums and out-of-pocket costs. Knowing how these work and what you're paying for can help you make sure you're not spending more than you should for care.
Premiums, or dues, are the payments you pay for your health plan. You may pay the entire premium or just the part not covered through your job. Premiums are like the sticker price for a plan, but there may be other costs you have to pay out of pocket.
Some medical expenses are not completely covered by your insurance benefits. Copayments, coinsurance, and deductibles are called out-of-pocket expenses. You can pay out-of-pocket expenses with tax-free dollars from an HSA, HRA, or FSA, if they are available to you.
Most plans require you to pay a copayment when you visit a doctor, receive a service, or fill a prescription. Copayments are a flat payment that can differ depending on the type of plan you have and the type of service or prescription. For example, if your copayment for doctor's office visits is $15, you must pay $15 every time you see your doctor.
Coinsurance is a percentage of the fee for a service, usually 10 percent or 20 percent, depending on your plan. Let's say that your coinsurance for hospital care is 10 percent and your hospital bill costs $1,000. You pay $100 out of pocket (10 percent of the bill); your health plan pays the remaining $900.
A health plan deductible is the amount you must pay for your care before your benefits kick in. For example, if your annual deductible for prescription drugs is $100 and your annual drug cost is $300, you pay $100 (the deductible) and your health plan pays the remaining $200 for covered prescriptions.