The end of open enrollment, December 15th for most health insurance plans, including coverage through the US Health Insurance Marketplace, is quickly approaching. We at ABD want to make sure you have the information you need to make the best choice for you and your family.
First, let’s start with the basics.
A premium is the amount of money that you and/or your employer pay monthly for insurance coverage.
Your deductible is a fixed dollar amount that you pay for health care services before your health insurance provider begins to pay. Most of what you pay for out-of-pocket will go towards the deductible amount.
Co-insurance is a form of cost-sharing that requires the insured to pay a percentage of the costs of a covered health service after the deductible is met.
A co-payment (or copay) is a preset price for a covered health service that the insured must pay.
The out-of-pocket maximum is a limit on the dollar amount that the insured is required to pay during a plan year. This figure includes the deductible, co-payments and co-insurance. Once the insured reaches this maximum, the insurer will pay 100% of the costs until the end of the policy year or until the costs reach a lifetime maximum.
A health insurer’s network is a group of doctors, hospitals, suppliers, and other healthcare providers that the insurer has contracted with to provide services. Health care received from these organizations will typically cost the insured less than services received from out-of-network providers.
Knowing these key terms is necessary to understanding which health insurance plan is right for your family. Health plans with lower monthly premiums but higher deductibles, such as a High-Deductible Health Plan (HDHP) may be a better option for individuals and families who are healthy and don’t plan on using many healthcare services in the year, as they may anticipate that the money they put towards their deductible will be less than the cost of paying slightly higher premiums throughout the year.
Similarly, individuals and families who foresee more frequent medical visits and check-ups may choose to opt for a Health Maintenance Organization (HMO) plan, which often features a lower deductible and may prove helpful if out-of-pocket expenses could be higher in cost than the monthly premiums and co-pays. Plans like the Preferred Provider Organization (PPO) healthcare plan are similar in structure to the HMO but feature a wider network of pre-approved contracted healthcare providers and also higher monthly premiums and copayments. These plans are often helpful for people who require very specialized healthcare.
Choosing a healthcare plan that’s right for you and your family requires looking carefully at the plans available to you and making a decision based on your monthly budget and predicted healthcare expenses. Knowing exactly what these terms mean and how they work together in different plans is an invaluable first step towards making this important decision.
Be sure to stay up-to-date on the open enrollment dates that affect you if you rely on employer-provided health coverage. The open enrollment period for coverage through the US Health Insurance Marketplace ends on December 15th. Click here for more information.