We all know health insurance is important, but did you know that the average American family spends $22,221 on healthcare each year? And that number is only increasing! It’s no wonder that everyone is trying to save money on their health insurance. In this blog post, we’ll break down the different costs that are associated with a health insurance plan and why it’s important to know the differences between them. Keep reading to learn more!
What are the five different types of health insurance costs
Health insurance can be 
complicated and sometimes overwhelming. Knowing what costs to consider when purchasing health insurance is key to making a well-informed decision that meets your needs. There are five different components of health insurance cost: premiums, deductibles, coinsurance, copayments, and out-of-pocket maximums.
Premiums
Premiums refer to the amount of money you pay regularly for health insurance coverage; this cost is usually deducted or billed directly to you every month.
Deductible
The deductible is what you must pay before the insurance company starts covering medical costs. Deductibles can range from hundreds to thousands of dollars. Generally higher deductible plans result in lower premiums monthly.
Coinsurance
Coinsurance defines what portion of the bill you must share with the insurer after meeting your deductible. Generally the higher coinsurance you pay the lower the monthly premium. If you pay 50% of the cost of medical services you will pay less monthly than if you only have to pay 20%.
Copayment
Copayment is what you’re responsible for paying every time you receive a service or procedure; this fee usually stays fixed throughout the year.
Out-Of-Pocket Maximums
Finally, the out-of-pocket maximum or limit symbolizes what you pay in total for medical services until health plan coverage covers 100 percent of your bills— however, this doesn’t include premiums.
Once you understand all five types of costs associated with health insurance plans, then you can make an educated decision about what type of policy works best for your individual needs and budget.
Why it’s important that you understand all the costs associated with your health plan.
Understanding the different components of health insurance costs is essential for making an informed decision about what type of policy works best for your individual needs and budget. No one likes surprises so make sure you know how much it will cost to use your insurance. If you have a plan that doesn’t cost much monthly, but you end up with a large bill from your provider and didn’t budget for those costs it could end up creating debt that you weren’t expecting.
Premiums, deductibles, coinsurance, copayments, and out-of-pocket maximums are all important factors to consider when shopping around for a new health plan. Making sure you have sufficient coverage without overpaying can be tricky but with proper research, it’s possible to find an affordable option that meets your needs. It’s also wise to reassess your health insurance policies regularly as healthcare prices continue to rise.
For more information on how to pick insurance plans on the Marketplace exchange please check out: