Individual Health Insurance Basics, Part 2
Posted by | Posted in Health Insurance | Posted on 02-11-2009
My last post went over some basic information about individual health insurance. This time I’d like to dig deeper into how plans are priced.
How much does an individual health insurance plan cost? Cost is an important consideration when buying health insurance. Running quotes is the fastest way to find out what a policy might cost you. Generally speaking, a plan with more coverage will cost more than a plan with less coverage. You may find the benefits in an individual policy are simpler than in a group plan. And, there is usually a greater cost-sharing element. For example, you might have to pay co-payments, deductibles and coinsurance before the insurance plan pays any claims. But the more cost-sharing you are willing to take on, the less you pay for the insurance premiums.
Most people just want the peace of mind that they have coverage should they be diagnosed with a serious illness or have a bad accident. Many do not want or need an all-inclusive or very comprehensive plan because these tend to be more expensive. That’s why a basic benefit plan works for many people.
Here are a few insurance definitions you might find useful:
Annual Plan Deductible: The dollar amount that the insured must pay out-of-pocket each year before the insurance company will make any benefit payments for claims.
Coinsurance: The percentage an insured is required to pay for a medical claim, after the co-payment or deductible. For example, if you choose an 80/20 plan, you pay 20% of the eligible covered amount and the insurance company pays the other 80%.
Copayment: The amount specified in your plan that an insured person pays to a provider for a specific health care service at the time it is received. For example, an insured may pay a “$35 office visit copay”.
Out-of-pocket maximum: The maximum amount that an insured is required to pay under an insurance policy per year.
Visit Celtic’s Individual Health Insurance Learning Resources page to learn more.
Similar Posts:
- Finding the Right Individual Health Plan, Part 1: Assessing Your Benefit Needs
- Mini-Med Plans Don’t Really Help Workers
- Getting the Best Individual Health Insurance Quotes Online
- Open-Enrollment: A Good Time to Consider Individual Health
- The Case of The Vanishing Additional Insured
