A smart health insurance consumer knows that insurance costs are really a combination of costs which must be balanced. Cost considerations for health insurance are a combination of:
- Monthly Premiums which are deducted from each paycheck. The amount taken from your paycheck is usually only a portion of the total premium, the rest of which is paid by your employer.
- Office Visit and Prescription Drug Co-Pays which vary from insurance plan to insurance plan, but stay consistent once your plan is chosen. They may be as little as no co-pay or as much as $50 per visit depending on the plan you choose.
- Deductibles which vary by plan to plan. This is the amount of money, in total, that you must pay for your care before your insurance will begin helping you pay. Depending on the plan, they may run from $100 per year, to $5,000 per year or more.
Once you have paid the entire deductible amount from your pocket, there will usually be a percentage split from there. For example, some plans offer an 80/20 split, meaning, they will pay 80 percent of additional costs, and expect you to pay the remaining 20 percent. Other plans offer 60/40 or even 50/50.
Your total costs of insurance will be a balancing act, and you'll need to think them through to find the best balance for you. In general:
- The higher the premiums, the lower the co-pays.
- The higher the premiums, the lower the deductibles.
- The higher the premiums, the more favorable the split after the deductible has been paid.
Then you'll want to balance that with the service needs you listed above. For example, if you rarely need to visit the doctor, and you are very healthy in general, you might choose a smaller premium and a higher deductible to save yourself money.
Still confused? Then do some sample math. Using your list of needs developed in Step 1, figure out your cost for each of your insurance choices. Pretend each doctor visit costs $100 (as long as you use a consistent number, it won't matter if it's accurate.) Now use the potential insurer's list of premium costs, deductibles and co-pays to figure out how much your medical costs might be during the course of your guesstimate year. Don't forget to add in the costs of your prescription drugs.
When you are finished, you should have a pretty clear idea of which of the insurance plans will best fit your needs for both access and cost control.
