The Costs of Medical Insurance and Care
If you're like most insurance shoppers, your budget will be an important deciding factor in determining both the type and extent of the medical insurance you want to carry. Comparing different policies in terms of cost is done best if know ahead of time what costs you expect to incur during the year.
Outlines a method of estimating your annual health care costs
Describes the standard costs of medical insurance
Shows you how to best compare plans using this information
Often times, buying a health insurance policy is less a question of what you want and need than of what you can afford. This is an admitedly unfortunate aspect of our system of health care.
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Assessing your health care costs
An important first step in assessing medical insurance policies is estimating the cost of health care without coverage.
While it is impossible to gauge how much your health care expenses will be for any given year in the future, or even which services you will require, you can still make an educated guess based on your previous needs and medical histories.
If you're relatively healthy, then your annual medical expenses may consist of little more than office visit fees. If you have a big family, even these costs can amount to quite an uncomfortable sum.
If, on the other hand you have a chronic condition, or find your medical needs increasing with age, your expenditures estimate could be rather high.
The important thing to remember is to give yourself a little leeway when estimating. Unforeseen problems are the norm. (And who has ever seen a doctor's bill end up lower than expected?)
But these potential costs are only half the equation. The other side, is of course, what you'll pay for the coverage.
Assessing your medical insurance costs
The annual cost of medical insurance can be high, and there are many different fees to consider.
The first cost you'll encounter is your premium, which is the monthly fee you pay for the insurance coverage. Premiums can vary quite a bit, from less than $100 a month to many times that, depending on different factors including your level of coverage, age and current condition of your health.
The next cost to consider is the deductible. A deductible is a pre-arranged dollar figure that you will have to pay before the health insurance company begins to contribute any money to your health care costs. This can be a significant out-of-pocket expense, ranging from a few hundred dollars to a few thousand. The lower the deductible, the higher the premium, and vice versa. As a rule of thumb, you want your deductible to be as high as you can reasonably afford out-of-pocket in the case of an unforseen major medical emergency.
If you're generally healthy, and see your coverage as primarily insurance against a big loss, like cancer or a big auto accident with an uninsured driver, you might want to set the deductible high to keep premiums low. If, on the other hand, you're either ill often, or just see coverage as means of helping with the day-to-day expenses of health care, having a low deductible may be more attractive to you and worth the additional monthly cost which will be reflected in your higher premium.
The other expenses that you can change from policy to policy to alter the monthly premiums are co-payments and co-insurance. All medical insurance policies will ask that you agree to one or both of ways of sharing medical costs with your insurer. Both expenses require that you pay a relatively small part of each medical cost.
If you want to start comparing plans online right away, click over to eHealthInsurance, where you can fill out one short form, and gain access to price and feature comparisons from hundreds of health plans. Try it now, but don't forget to come back here and learn more about medical insurance...
Comparing health care costs with insurance costs
Now for the fun part. The best way to evaluate a medical insurance policy (or two or three) is to compare the annual cost of the coverage against typical annual costs without the coverage.
If a the cost of a policy is many times over what you would reasonably expect to pay without insurance, it's probably more coverage than you need. (Unless it's a very affordable policy, in which case, buy it, by all means!)
If, on the other hand, your health care costs are usually high, consider springing for the extra protection.
Remember: Always err on the side of caution. Insurance is preparation for the unexpected. It's cost should be higher than the cost of services rendered, because it's really intended to cover you on the big stuff.
For your convenience, we have prepared a printer-friendly list of questions about costs that you can fill out as you research plans. This will provide you with an at-a-glance comparison of various costs that normal insurance company marketing material does not readily provide.
Learn more about affordable health care
If good medical insurance just seems like too much of a financial burden, keep in mind that there are ways to reduce your monthly premiums, like paying a higher deductible or co-payments or by forgoing "unnecessary" health care coverage, like vision or mental health care. But don't sacrifice too much.
Check out our section on affordable health insurance for more tips.
Want to compare plans now? Find out how to get online health insurance quotes instantly. Or, read up on the different types of health plans you'll have to choose from.
Next: What types of health plans are right for you?