When it comes to health insurance costs, there are a variety of factors that come into play. Your state and federal laws, the type of coverage (employer or individual), as well as plan type all play a role.
The cost of health insurance can differ considerably across regions. This article explores some of the primary reasons why this might be so.
Premiums
Premiums are the monthly payments you make in exchange for health insurance coverage. These payments may be made directly to the insurance company or through an employer-sponsored plan.
The cost of health insurance is determined by several factors, including age and family size. Older individuals tend to pay higher premiums due to the increasing complexity of their healthcare needs as they age.
Your geographic location can also influence the cost of insurance you purchase. People living in rural areas may pay less for coverage than those living in cities, since rural areas tend to offer cheaper premiums.
You can reduce your premiums by searching for a better deal. Additionally, ask your insurance representative about discounts or other ways to lower the cost of coverage.
Deductibles
A deductible is an amount that must be paid each plan year before your insurance begins covering medical costs. It can range from a high to low amount depending on the plan.
Deductibles can be applied to a variety of services, such as visits to your primary care provider, prescriptions, tests and procedures. They are separate from any out-of-pocket maximum you may have.
Health insurance plans typically feature either an individual or family deductible. An individual deductible is usually the same for everyone, while a family deductible can be twice as large.
Deductibles are calculated in a variety of ways, depending on your income and coverage type. State-specific rules may also apply, so make sure you check the deductible details for any plan before signing up.
Co-pays
When it comes to health insurance, there are many elements you may not think about that can have an effect on your costs. These include premiums, deductibles and co-pays – all of which have an effect on how much you pay in total.
Your deductible is the amount you must pay before your health insurance company begins covering medical bills. This amount varies by plan.
Once your medical bill has been paid in full, coinsurance kicks in. So if your deductible is $1,000 and coinsurance rate is 20%, for a $100 doctor’s office visit that meets both criteria, then you would pay $20 after meeting the deductible.
Most health insurance plans include copays, which are fixed amounts you pay for certain services like a regular doctor’s visit or emergency transportation. While the amount varies based on the service provided (e.g., emergency transport), most copays are less than $30.
Out-of-pocket expenses
When seeking medical assistance, it’s essential to know how much you will have to pay out-of-pocket. This amount may differ depending on your plan.
Typically, you will pay your deductible and then your insurance will cover the rest of your costs. While deductible amounts vary between plans, generally speaking there is an annual limit on how much of it must be spent out-of-pocket each year.
Once your deductible has been met, your health insurer typically begins covering certain services like x-rays, hospital visits and emergency care. They may also cover some prescription medicines with their assistance but not all of them.
In 2017, nearly one in 20 Americans under the age of 64 spent more than $1,700 out-of-pocket for medical services. Of this group, most had employer coverage and incomes above 400% of the federal poverty level (FPL).
