Unless you are familiar with health insurance then the costs involved in a health insurance plan could appear to be a bit complex and many people are surprised that, after they have shelled out what seems like a small fortune, they find themselves landed with a bill the very first time they make a claim. Before you are hit with an enormous medical bill therefore, it would be a good idea to take a moment to learn just what type of costs you can expect to incur on your health insurance plan. The first and probably most obvious cost is the monthly premium or, if you so choose, the quarterly premium or annual premium. If you are a member of an employer's or union group insurance plan then you will normally be asked to meet only a percentage of the premium and this will often be taken directly from your pay check. Most health insurance plans also include an annual deductible which is a sum of money which you will be required to pay before your insurer starts paying out on any claims. In other words, with an annual deductible of say $1,000 you will need to pay the first $1,000 of your medical bills each year before your insurer will start paying out. You might be familiar with the principle of paying a deductible from your experience with car insurance policies and, if so, will also know that the more the deductible on your plan the lower your premiums will be. In addition, if you have a family health insurance plan then this will typically include multiple deductibles for the individual members covered under the policy. The majority of health insurance plans will also include a co-payment which is a fixed amount of money which you will be required to pay towards each medical bill. Just how much you will be required to pay in co-payments will depend largely on the type of policy you have. For instance, co-payments on HMO plans are often lower than those on indemnity plans. In addition, the co-payment can also vary between different forms of medical service and, if you are enrolled in an HMO plan, will normally rise if you seek treatment outside of the HMO network. In cases where no co-payment is required you will usually find that this is replaced by co-insurance which is very similar and is a sum of money, in this case expressed as a percentage, which you will need to pay towards each medical bill. A common co-insurance ratio is 80/20 meaning that your insurer will pay 80% of any medical bill while you pay 20%. As with co-payments, co-insurance will often rise if, as a member of an HMO plan, you seek treatment outside of the HMO's network. In this event you will also find that, whenever a claim exceeds what is considered by the insurance company to be 'reasonable and customary', you might be required to meet the additional cost. By now you will see that comparing different health insurance plans is about a great deal more than merely comparing plan premiums. As a result, it is extremely important that you read the small print of any health insurance quote most carefully and avoid the common temptation to just select the plan with the smallest monthly premium. If you want to keep costs down and are in an HMO plan then you should try to stick within the HMO's network and, if you do feel that it is necessary to go outside of the HMO's network, then compare actual treatment costs to what your insurer considers to be 'reasonable and customary' before undergoing treatment. You can also keep your costs under control on most plans by raising or lowering the deductible and by selecting higher or lower co-insurance. Just how this can be done is beyond the scope of this short article but is a question of balancing the different costs involved against the likelihood of having to claim on the plan.
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