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Health insurance Questions answered

Premium: The monthly fee for your insurance.

If you belong to an employer-sponssered plan, the premium is likely deducted from each paycheck as pre-tax dollars. If you purchase your own health insurance plan, you may have the option to pay your premium annually, quarterly, or monthly. Health insurance premiums vary greatly depending on what medical expenses the plan covers, which doctors you can see, and how much you will have to pay in other ways when you use services.

Deductible: How much you must kick-in for care first before your insurer pays.

For example, If you have a $2500.00 deductible, and undergo three $1000.00 procedures in a year, you will have to pay the full bill for the first two procedures and $500 of the third...your insurance will cover half of the third procedure.

Co-Pay: your cost for routine services to which your deductible does not apply.

For example, a plan may require co-pays of $20 for office visits, $100 for ER visits, $15 for generic prescriptions, or $30 for name brand drugs.

Co-Insurance: The percentage you must pay for care after you've met your deductible. 

Co-insurance kicks in after you hit your deductible. If your plan has a $100 deductible and 30% co-insurance and you use $1000 in services, you'll pay the $100 PLUS 30% of the remaining $900, up to your out-of-pocket maximum. You may find plans with no co-insurance, some with 20/80 or 50/50 coinsurance, or other combinations.

Out-of-pocket maximum: The absolute max you'll pay annually. 

Your out-of-pocket maximum is an important feature of your plan because it limits the total amount you pay each calendar year for healthcare including co-pays, deductibles and co-insurance.

If your policy carries a $2500 out-of-pocket maximum and you get sick and require a lot of healthcare services, the most you will pay in a year is $2500. After that, insurance pick up the rest of the tab. 

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