Your Health Insurance - What You’re Paying

Part 1: What You’re Paying…

With the ever-rising costs of insurance and health care in general, you’re likely to pay a small fortune if you have to buy an insurance policy that isn’t employer-subsidized. Premiums may start at $200 to $350 per month for an individual policy. Decent family coverage can begin even higher than that. If you’re fortunate enough to have an employer-provided policy, you probably have a choice of plans. Some are better than others, but you should be able to find one that meets your needs and is affordable.

When adding up what you’ll have to pay out-of-pocket, whether with employer- or individual plans, here’s what to look for:

  • The premium - This, of course, is what you pay each month. Employers typically subsidize all or part of your coverage, and often pay something toward insuring your family.
  • The deductible - The deductible is the amount that you spend out-of-pocket yearly before the insurance kicks in and begins paying. In employer plans deductibles can be begin as low as zero for some Health Maintenance Organizations (HMOs). Affordable individual plans have deductibles of $1,000 or more. The higher your deductible, the lower your premium cost.
  • The co-payment, or co-insurance - This is the amount that you pay toward each medical service. A typical HMO co-pay might be $15 to $20 for a visit to the doctor’s office. But when HMO members go to doctors outside of the network, they can expect to pay 30 to 50 percent of the bill. With individual insurance, a standard co-pay is 20 percent.
  • The annual cap - This is the accumulated maximum total that you’ll pay out-of-pocket in any year for your covered medical expenses. It typically runs in the $2,500 to $4,000 range, depending on your specific plan. Once you’ve spent that much, the plan pays your covered expenses in full for the remainder of the current year.
  • The lifetime cap - The lifetime cap is the total accumulated amount that your plan will pay over your lifetime. Look for lifetime coverage of at least $1 million. Some plans have lifetime limits for certain conditions or treatments.
  • The annual limits - Plans often place restrictions on what they’ll pay or how often you can receive certain services. For instance, they may only pay for ten chiropractic visits in one year. Any more than that, and you’ll have to pick up the tab.
  • The services which aren’t covered - Needless to say, this is the list of things that you must pay for yourself. Every plan has one. Some typical examples may include cosmetic surgery, hearing aids, infertility treatments, rehabilitation therapy lasting for more than two months, and preexisting conditions. Some illnesses are excluded altogether.
  • The cost of choice - This applies only to managed-care plans, which have an approved list of service providers which you’re allowed to see without a preauthorization. Going outside of this network will cost you a considerably larger portion of the bill.

In Part 2 of this series, we’ll look at the some of the things that a reasonable healthcare plan should cover.

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