Whether you’re shopping for individual health insurance for yourself or group health insurance coverage for your employees, there are a few terms everyone needs to know. A good understanding of common healthcare buzzwords will make it easier for you to find an insurance plan that meets your needs - and fits within your budget.
Premium: The amount paid to the insurance company regularly (monthly, typically) to keep coverage effective.
Copayment: The flat fee paid upfront for doctor visits, prescriptions, and other healthcare services (also known as copay).
Out-of-Pocket Maximum: The plan’s limit or maximum amount charged to the insured person for all healthcare services in the year.
Deductible: The amount paid out-of-pocket before the insurance plan kicks in and starts to cover costs.
Coinsurance: The percentage paid for the cost of covered healthcare services after you meet your deductible.
It also pays to remember these few points when shopping for insurance plans:
A good rule of thumb is to select an insurance plan with a deductible that doesn’t exceed 5% of your gross annual income.
Deductibles are inversely correlated to premiums (low deductibles mean higher premiums while high deductibles mean lower premiums).
The out-of-pocket maximum is the total sum of the deductible, copayments, and coinsurance.
Health insurance shopping doesn’t have to be difficult. With enough healthcare literacy and insurance advice at hand, anyone can land the right insurance plan.
For more health insurance information, tips, and solutions, visit NY Small Health.