You're deciding which
insurance plan to purchase, and want to know, how
much is it going to cost. Well, it's not so simple. Sometimes, you pay money
toward your health care. Sometimes, the insurance
company pays money. But when? To figure it all out,
there are three main ideas you need to know. Premiums, deductibles,
and out-of-pocket maximum. It may sound complicated,
but stay with us. It's not as hard to
understand as you think. First, premiums. Think of your insurance
as a monthly membership. Every month, you pay the same
amount in order to be a member. That amount is your premium. With your premium,
say, $200 a month, you get some preventive
care for free. This includes care like
vaccines and screening for diabetes, cholesterol,
and breast cancer. This care is covered
by your premium.
But what if you need more
than just preventive care? If you need a health service
beyond preventive care– illnesses, a broken leg,
emergency room visits– you usually need to pay extra. How much? Well, that changes over time. There are three main stages. First, you pay. Then, your insurance pays
some, and you pay some. And finally, your
insurance pays everything. So how does this work? In the first stage, at
the beginning of the year, you pay for most
of your health care until you reach your deductible. Remember that word? Deductible. A deductible is
the amount of money you have to pay for your
care before the insurance company will share the costs. So let's say your
deductible is $500. That means, almost every
time you get health services, you will pay for
all those services, until you've paid
a total of $500. It's like you're
filling up a bucket.
Once you add enough
to that bucket so that you pay your
whole deductible, then everything changes. Then, you enter into
the second stage. Now, every time you
get health services, your insurance
company will share the cost of those services. How much? That depends on your plan. Usually, you pay
part of the cost– fees called co-pays,
or coinsurance– and your insurance
pays the rest.
But the second stage
doesn't go on forever. If you reach a
certain amount, you won't have to pay
for any services. Remember that bucket? Every time you fill it with
co-pays and coinsurance, your insurance company
is keeping track. If you fill that
bucket up to the top, everything changes again. You enter stage three. From this point on,
your insurance company pays everything for
the rest of the year. That's right. Every dollar of
your health services paid by your insurance company. So what's at the
top of that bucket? It's called your
out-of-pocket maximum. This is the most money you
will pay for your health care over an entire year. So let's say your out-of-pocket
maximum is $2,000. After you pay your
$500 deductible, and if you pay an additional
$1,500 for various health services, you've hit your
out-of-pocket maximum. From then on, you don't pay a
penny more for covered health care services.
It's important to know that
every year, this starts over. So next year, you
go back to stage one and need to meet your
deductible yet again. So let's review. You pay a monthly premium
to get into the club, and get many preventive
services free. You pay for other services
until you meet your deductible. Then, you and your
insurance company share the costs of
health services. You pay co-pays or
coinsurance, and your insurance pays the rest, until you hit
your out-of-pocket maximum.
After that, your insurance
company pays everything. So how much does
your insurance cost? You will at least pay for
your monthly premiums. And, at most, you will pay
for your monthly premiums plus your out-of-pocket maximum. It all depends on
the plan you choose and the care that you
and your family need. You can get free help from
a healthcare.gov assistor to choose the plan that's
right for your family.
