There are several out-of-pocket expenses you will have to pay in association with your health insurance policy. The first is your premium, or the cost required to purchase healthcare coverage. Your premium is the initial and ongoing price for securing a health insurance policy from an insurance provider. But how is your premium determined? Are there ways to adjust it in order to secure a more affordable price for coverage? And what does it have to do with your other out-of-pocket medical expenses? Before you select a suitable policy, here are just a few things you need to know about health insurance premiums.
When it comes to health insurance premiums, there is a formula for determining how much you will be required to pay, and there are several factors taken into consideration. You might think that your health and your health history are the most important, but this is not necessarily true. Your insurance provider may want to ascertain your medical state with a physical exam and a questionnaire pertaining to your current lifestyle habits (diet, exercise, use of tobacco or alcohol, etc.) and your medical history, but these factors tend to be more important when applying for life insurance. In terms of calculating premiums for health insurance coverage, most premiums are based on the costs associated with healthcare in general in your specific region, and the cost of selling and administering policies will also come heavily into play.
You have the opportunity to adjust the premium you will pay in a number of ways. First and foremost, you will need to consider the policy you choose. Your premium will be affected by the amount of coverage you select and the particulars of your policy. If you want to visit specific doctors, for example, you may have to select a more expensive policy than if you were willing to see pre-approved network doctors for needed services.
In addition, the deductibles and co-pays you agree to will impact your premiums. If you have ongoing medical costs, you probably prefer the lowest possible deductible. With a low deductible, you can quickly pay your portion each year and have your insurance pay the rest. This will mean paying a higher premium, but it will be offset by the payments your insurance provider makes toward your medical bills. And if you’re willing to pay higher in-office co-pays, you could lower your premiums. Rather than opting for monthly payments, you may also be able to secure a slightly lower price by paying a lump sum for your premium annually. Some companies even offer discounts for customers willing to go paperless, receiving their statements and communiqués via email.
While insurance premiums can be quite high, there are several ways to reduce your expenses when it comes to securing the coverage you need. Just keep in mind that paying less on your premiums now could mean paying quite a bit more down the line for a deductible should you suffer a serious injury or illness. When you consider your healthcare needs and your budget before you select a policy, you’ll find the coverage you need at a price that works for you.