03/08/2021
The cost of your health insurance policy goes way beyond your monthly premiums. If you really want to know how much you’ll spend this year, you need to take your monthly premiums and add in co-pays, deductibles, and co-insurance amounts.
As you evaluate a new health insurance plan, much sure you accurately estimate real costs, understand insurance lingo, and ask yourself these important questions:
1. What are the co-pays? If you visit the doctor regularly or plan to this year for pregnancy or chronic condition, your co-pays will add up quickly. When comparing plans, multiply the co-pay amount by how many times you anticipate seeing the doctor this year to calculate your annual co-pay cost.
2. What is the policy deductible? Your deductible is the amount you will be expected to pay out-of-pocket before the full terms of your policy kick in. A large deductible means a lower monthly premium, while a small deductible means a higher premium. Decide which deductible is best for you. Would you rather pay more every month on premiums or pay medical bills as they come? Keep in mind that each individual on your policy will have his or her own deductible amount.
3. Is there a co-insurance amount? To keep premiums low, some plans offer co-insurance. After you have paid your deductible, co-insurance is a percentage of the medical bills you will be expected to pay. For example, if you have an 80/20 co-insurance plan, your insurance company will pay 80% of the bill, and you will pay 20%. As you research plans, assess how much medical care you think you will need to get an estimate of your out-of-pocket expenses.
4. What is the out-of-pocket limit? The out-of-pocket limit is the maximum amount you will be required to pay for the year. If you need a safe estimate on your yearly health care costs, take the monthly premiums (x 12), and add the out-of-pocket limit. Depending on your needs and level of care, your costs may be substantially lower — but never higher than this out-of-pocket maximum.
As always, we’re here to answer any questions you may have and help you find the best plan for your business or you and your family! Call Paul at Moritz Financial Group in Austin, Texas…(512) 454-8800.
