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  Health Insurance Costs: The Terms and their Implications

Are you aware about the intricacies of health insurance costs? Health insurance costs continue to increase year after year, but have you ever wondered how these costs affect your health insurance coverage? You pay the amount on a monthly basis as premium for your health insurance, so you will come to know if this amount increases. However, are you aware of the other costs in your health insurance policy? It is good to know about them because soon you might be handed a hefty medical bill. Under this condition, the following brief about health insurance costs will help you a lot.

What is a Premium?

A premium is the amount that you pay for the benefits that your health insurance plan offers to you. The premium to be paid is distributed over several months during which you pay it as equal installments. If you participate in group insurance, chances are your employer or union will share a part of this cost.

What is a Deductible?

A deductible is the amount you have to pay before insurance starts paying up your claims. You should understand this aspect in detail if your health insurance policy has an annual deductible element. For instance, with car insurance, a higher deductible means that your monthly installment for premium installment is lower. Usually, a family insurance plans has a number of deductibles.

What is a Co-Payment?

A co-payment is the amount you, the insured, pay whenever you see a doctor. This varies on the kind of health insurance plan you have. Usually, an HMO requires the least co-payment. However, if you choose a medical care provider outside the network of your insurance provider, your co-payment amount can increase.

What is Co-Insurance?

Co-Insurance is the amount that you, the insured, need to pay after you have given the deductible. Usually, an insurance company pays 80% and the remaining 20% is to be paid by the policyholder. If your medical care provider is outside your insurance company's network, you may have to shell out a bigger amount. If your medical claim exceeds what your insurance company thinks is "reasonable and customary," again you may need to pay the co-insurance.

If you are still confused about these terms, approach someone who can explain the intricacies to you. You need to ask about these terms when seeking health insurance online. You should compare not only the premium that you need to give out for every health insurance company but also the terms specified above. Whoever is quoting you the premium; ask him or her to clearly define the deductible also. Inquire if the deductible varies on the kind of service you avail. Ensure that you know what is the co-payment and the co-insurance amounts you need to pay. Do not hesitate to ask for any other costs that are not apparent to you.

If you want to keep the costs within limit, choose a medical care provider who is in the insurance company's network. If you happen to choose one outside the network, ensure that the fees are very much within the limits of what your insurance company defines as "reasonable and customary." If the fees exceed this limit, take your time to find one who is within the limit. The best way to save money and keep medical costs to a minimum is to lead a health lifestyle and seek medical care only if it is absolutely essential.