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The Real Cost Of Health Insurance
By: Ron King
Do you know the actual cost of your health insurance?
Everyone knows that health insurance costs are continually rising, but how do
these spiraling costs affect your health insurance coverage? You know how much
you pay every month for your health insurance premium, so it's easy to know when
this cost goes up. But what about all the other costs involved with health
insurance?
Before you're hit with an unexpectedly large medical bill, find out about the
hidden costs of your health insurance.
The Premium
The premium is the amount you'll pay for the benefits covered under your health
insurance plan. The premium is typically broken down into equal monthly
payments. If you've got group insurance, your employer or union is probably
sharing some percentage of this cost.
The Deductible
If your health insurance policy includes an annual deductible, you need to
understand the details. A deductible is an amount you are responsible for paying
before the insurance company begins paying out claims. As with car insurance,
the higher your deductible, the lower your monthly premium and vice versa. A
family health insurance plan typically includes multiple deductibles, one for
each family member.
The Co-Payment
A co-payment is a fixed amount you have to pay each time you visit the doctor.
The co-payment amount will depend on the type of health plan you have.
Typically, an HMO will have the lowest co-payment. The co-payment can increase,
however, for different types of medical service or if you visit a doctor or
hospital outside the network.
Co-Insurance
Co-Insurance is the amount of a claim that the insured is responsible for
paying, once the deductible has been met. A typical ratio is 80/20, where the
insurance company pays 80% of a claim and the insured pays 20%. An insured's
percentage will usually increase when he or she goes outside the network. Also
when the claim exceeds what the insurance company deems "reasonable and
customary," the difference is another form of co-insurance that you must pay.
Comparing Quotes
Make sure you fully understand these health insurance costs. Ask about them when
requesting quotes, especially online health insurance quotes. When comparing
quotes from different insurance companies, it's essential to know all your
costs, not just the premium. Make sure the person preparing your quote clearly
defines the deductible amount and whether there are separate deductibles for
different types of services, the co-payment amount and the co-insurance amounts.
Also, ask the rep to describe any other costs that may not be readily apparent.
Holding Down Your Costs
There are a number of ways you can help control costs once you have selected a
health insurance plan. If yours is a "managed care plan," be sure to stay within
your network. If you can choose any medical care professional, be sure that the
provider's fees for the services you'll need fall within your insurance
company's "reasonable and customary" guidelines. If not, shop around for a less
expensive provider.
Other tips for keeping health insurance costs at a minimum include choosing a
healthier lifestyle and seeking medical care only when absolutely necessary.
After that health care costs are largely beyond the individual's control. The
best medical advice would be, don't get an ulcer worrying about them.
About the Author:
Ron King is a full-time researcher, writer, and web developer. Visit http://www.healthinsuring.com
to learn more about this subject. Copyright 2005 Ron King.
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