Ask yourself these questions:
- What are my regular prescription costs?
- How important is it to keep my current doctors, hospitals or pharmacy?
- Are there any upcoming surgeries, procedures, or potential healthcare concerns to consider?
- How much can I afford to spend on healthcare costs?
Insurance terms you should know
There are 5 insurance terms you should understand when looking at the costs of a healthcare plan: coinsurance, copay, deductible, premium and maximum out-of-pocket.
- Premium is the amount your health insurance plan costs each month. You must pay your premiums every month, even if you do not use any healthcare services.
- Deductible is the amount you pay toward medical services or prescriptions before your insurance plan contributes. For example, if your deductible is $1,500, you pay all costs for covered medical care until you reach that amount. Most preventive services are covered 100% by your insurance and are not counted toward your deductible.
- Coinsurance is a percentage of your medical and prescription costs that you pay out of pocket after your deductible is met. For example, if your plan’s coinsurance is 20%, this means you will pay 20% of the cost of your medical or prescription care after meeting your deductible. Your health insurance plan will pay the other 80%.
- Copay is a fixed dollar amount you pay for each medical service or prescription. An example would be making a $15 copay for a prescription that actually costs more. You are only responsible for the copay.
- Maximum out-of-pocket is the most you must pay toward covered expenses. This would include any deductibles, copays and coinsurance. Once you have reached your maximum out-of-pocket limit, your insurance will pay all covered medical services and prescription costs for the remainder of the year.
How much can you afford?
Knowing how much you can afford and your current state of health are key when choosing a plan.
The good news is that some medical services are now available to you at no cost, no matter what type of healthcare plan you choose. Preventive services such as immunizations and screenings are covered when using an in-network provider, even if you haven’t met your yearly deductible.
There are essentially 2 different ways to set up your healthcare expenses:
- Higher premiums/lower deductible
It may be more cost effective for you to pay a higher monthly premium on a plan with a lower deductible. This means your up-front costs may be higher on a monthly basis, but if the unexpected happens your insurance will “kick in” quicker, paying more toward covered medical services. You would only have to continue to pay your monthly premium and any required coinsurance once the lower deductible is met.
- Lower premiums/higher deductible
If you are generally healthy and don’t anticipate the need for medical services or medications, you might want to opt for lower monthly premiums and a higher deductible. Your monthly payment will be lower, but if you end up needing medical care, you will have to meet a higher deductible before your insurance begins to pay toward covered expenses. You would continue to pay your monthly premiums and any coinsurance.
The actual costs of these plans can vary depending on where you live. If you would like to get a more accurate idea of the amount you might pay for health insurance visit , opens new window.
What if I can’t afford health insurance?
Every American adult is required to purchase health insurance if they are able. However, there are some exceptions. There is financial assistance available for many individuals and families which will offset the cost of healthcare premiums and out-of-pocket expenses. Depending on your household income and size, you may qualify for tax credits or lower out-of-pocket costs. See if you qualify by visiting , opens new window.
Making your final decision
There is no perfect answer—only you can decide what is right for you. Carefully consider your budget and what you can currently afford, as well as just how much coverage you think you might need in the coming year. Then make the best decision you can about what is best for you and your family.
If you’d like to learn more about the types of insurance, you can start with our article on , opens new window.