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The time for signing up for health insurance has arrived. Open enrollment periods are under way or about to begin, meaning you will have some decisions to make. First, consider the level of coverage you want for you and your family, and compare prices. The amount of the premium is only one factor. If you’ll need medical services or prescription drugs there are other costs, too.
Next, think about out-of-pocket costs. If you pay a lower premium, it’s likely you will have higher out-of-pocket costs. This is just one reason why it’s a good idea to make a spending and savings plan centered on your health care costs, including the cost of your insurance.
Here are some examples of costs associated with your health plan:
Premium: This is the amount you need to pay, usually each month, for health insurance coverage.
Deductible: You will be responsible for paying a certain amount of your health care costs before your plan begins to cover these costs. For example, you might have to pay the first $500 for doctor visits before your insurance pays.
Co-Pay: This is a fixed amount you have to pay each time you receive treatment from a doctor or purchase prescription drugs.
Co-Insurance: This is a percentage you pay for each service after you have met the deductible. For example, a coinsurance level of 20 percent means that the plan pays 80 percent of the costs, while you pay the remaining 20 percent.
Annual Out-of-Pocket Maximum: This is the highest amount of health care costs you will have to pay yourself; it’s the limit on what you’ll have to pay in a year. For example, if your policy has a maximum of $5,000, your policy will pay all medical expenses for the rest of the year after you have paid $5,000 in co-payments and coinsurance.
Get more information on health insurance and managing your health care costs on these websites:
- Managing Your Health Care — Office of Minnesota Attorney General
- Frequently Asked Questions — MNSure, Minnesota's online insurance marketplace
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