The portion of medical expenses you are responsible for paying when you actually receive health care. Separate from your monthly premium.
The deductible is the amount of money you must pay in out-of-pocket costs before the insurer starts to pay their share of costs. If the deductible is $1,000, you would be required to pay the first $1,000 in health care you receive each year, after which the insurance company would start paying its share.
A fixed upfront amount you must pay each time you receive care that is subject to a copay. For example, you might be required to pay a $30 copayment each time you visit the doctor.
The percentage of costs you pay once you've met your annual deductible. A gold tier plan beneficiary, for example, pays 20% of costs once they have paid their deductible, with the insurer covering the remaining 80%.
The maximum amount of deductible, copays, and coinsurance you are responsible for the year. Once met, the insurance provider will cover 100% of your expenses for the remainder of the year.
In 2020, the average national cost for health insurance was $456 for an individual and $1,152 for a family per month.
You can buy individual or family coverage from the Affordable Care Act marketplace or directly from a health insurance company during the Open Enrollment Period, often referred to as the OEP. For most states, the OEP is from November 1 to December 15 each year.
If your company does not offer an employer-sponsored plan, and if you are not eligible for Medicare or Medicaid, the only option is to purchase insurance policies directly from private insurance companies. This can be done through your state's health insurance marketplace.
When reading a health insurance plan, you want to know what you're paying for, how much it costs, and whether or not the coverage is good enough for your needs. There are five main types of plans:
Health Maintenance Organization (HMO)
An HMO provides enrollees with coverage through a specific network of healthcare providers. These plans are more affordable, but patients must use specific doctors and specialists to get the costs covered.
Preferred Provider Organization (PPO)
A PPO gives enrollees flexibility to see healthcare providers outside of the network without a referral, but the rates for doing so will be more expensive.
Point-of-Service Plan (POS)
A POS plan is a little of both. It operates like an HMO if you stay within the network but gives you the option of using out-of-network doctors if you receive a referral.
High-Deductible Health Plan (HDHP)
An HDHP has a higher deductible by typically lower premiums than other plans. This makes it ideal for young and healthy people who are unlikely to need medical care.
Catastrophic plans are available to individuals under 30 years old. The plans have low monthly premiums and prioritize protecting you from high medical bills for catastrophic health events.
These all have different pros and cons that can make one more attractive than another in certain cases. It's important to read up on these before deciding which plan is right for you!