When you’re choosing a health plan, there are a lot of factors to consider. Costs are a big one!
Generally, the higher your premiums, the lower your out-of-pocket costs, and vice versa.
For any health plan you choose, you’ll pay a monthly payment, called a premium, to keep your policy active. Depending on your plan, you may also pay each time you receive medical care. Those out-of-pocket costs may include copayments, deductibles and coinsurance.
Copayments: A fixed amount you pay for a covered health care service. It’s usually listed on your insurance card, such as “$15 office.” That means you’d pay $15 towards an office visit with your doctor, no matter the total cost. Prescriptions have copays, too. The copays you pay do not count toward your deductible. In-network copayments will typically be less than out-of-network copayments.
Deductibles: The amount you could owe during a coverage period (usually one year) for health care services your health insurance or plan covers before your health insurance or plan begins to pay.
Coinsurance: Once you’ve met your deductible, you may still have to pay a percentage of the bill for the covered health care services you receive. That’s called coinsurance. Say you’ve met your deductible, have a $15 copay and coinsurance of 20 percent. On a $500 bill, you’ll likely owe $15 plus $100 (20% of $500) for a total of $115. In this example, your health plan would pay the balance of $385.
When looking at plan costs, think about how you use medical services. If you’re pretty healthy and rarely visit a doctor or a hospital, it may make sense to choose a plan with lower premiums. Just recognize that in return for those lower premiums, your out-of-pocket costs will be higher when you do receive care.
If you use health care more frequently, it may make sense to pay a little more each month in your premium so you don’t have to dig as deep into your wallet every time you need care.
In-network doctors and facilities help keep costs down.
When you need medical care, it can be helpful to choose a provider or a facility in your health plan’s “network.”
The network includes the facilities, providers and suppliers your health insurer or plan has contracted with to provide health care services. Your insurance company has agreed to pay those health care providers a certain amount of money for your visits – usually a discounted rate. Because of those discounts, you pay less when you see a health care provider in the network versus one who’s outside the network.
For out-of-network providers, your insurance may cover only a fraction of the cost of care – or none at all – depending on your plan.
Before you make your next appointment, check with your health plan to make sure the provider or facility is “in network.” When in doubt, call the number on your health plan ID card to get the most up-to-date information.
Take advantage of tech tools.
Some health plans have created apps and web-based resources to help you do everything from finding a doctor to comparing costs. For example, the UnitedHealthcare Health4Me® app makes it possible for people to comparison shop for care based on quality and cost for more than 800 common services.
Open an HSA.
More employers are offering health plans that include a Health Savings Account (HSA) option. An HSA is a personal bank account specifically for health-related expenses. These accounts offer a triple tax advantage: money is deposited pre-tax from your paycheck, accrues interest tax-free and withdraws are not taxed as long as the money is used for qualified health-related expenses.
To learn more, check out Health Insurance Basics.