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Lesson 2: the Costs of Your Policy
No primer on health insurance would be complete without a discussion of the various expenses involved with health insurance coverage. So we'll do a brief run-down of what you can expect to pay.
Every type of health plan will require payment of a monthly premium. Generally speaking, premiums run highest on pure indemnity plans, and lowest on HMO plans. But they also reflect the other policy costs, namely deductible, coinsurance, and copayments.
Let's look at each one separately:
 The deductible is the amount you agree to pay for your medical care per year before your coverage kicks. This can very substantially from one policy to another, and is (for obvious reasons), a huge determinant of the total premium.
The copayment is the amount that you are expected to pay towards the care you receive; for example, if a certain procedure costs $1400, you may be required to "chip in" $300 (these numbers are made up, but you get the picture).
Coinsurance is basically the same as a copayment, except that instead of a flat dollar fee that you contribute towards your medical care, coinsurance is calculated as a percentage of the total cost of the care you receive.
One very important thing to keep in mind about copayments (and by extension, coinsurance) is that they can vary greatly depending on what medical service you receive. For example, an emergency room visit may have a much larger copayment requirement than a visit to your regular, in-network doctor.
Sidebar
The operative word in the previous sentence is in-network. Most managed care plans charge different copayments for care received in a hospital that's part of their network (for example), as opposed to care received outside. This is important to keep in mind when selecting your plan, because it affects your premium (and out-of-pocket expenses) a great deal.
Start comparing plans for yourself and your family, or for your small business.
There's savings in them deductibles
One key thing to remember about deductibles and copayments is that by manipulating these parts of your policy, you can save quite a bit on your premium.
But this is where the big decisions start: how much are you willing to sacrifice in protection in order to save some money every month?
Often, younger, healthier people opt of higher limits on these amounts, because the odds of needing major care are lower for them. But if you are expecting a child (or are even thinking about expecting), or if you have any kind of family history of chronic conditions, you should be careful.
In the end, the decision is yours. Just be certain to review your policy every year, to make sure that you are carrying the optimal amount of coverage for your own health and that of your wallet.
The key to being happy with your health insurance . . .
. . . lies in making sure that the level of "management" you accept in your health care matches your needs and desires.
And in making absolutely certain that you're getting all the benefits of managed care (less expensive care, better communication between various caregivers, and fewer unnecessary test and procedures) without any of the potential drawbacks of managed care (restricted access to information about all your health care options, lack of flexibility in care, and loss of valuable doctor-patient trust).
Helping you optimize your health care is the number one goal of this course. And we can't stress enough how important this process is - it can quite literally be a matter of life or death.
Well, that's it for today. We don't want to lose you before we get to the good stuff.
P.S. Do you know someone who might benefit from reading this course? If so, why not let them know about it? Use the the "share" link below to send them this page. We, and your friend, will thank you.
Next: Lesson 3: choosing the RIGHT health plan
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