When choosing a health insurance plan, many people simply look at the premium to be paid to the insurer. This is a big mistake as it often leads to "surprises" that can easily throw any household budget off-balance.


Key Costs (Outside Premium)


In general, there are three other significant costs that must be considered by anyone shopping for a health insurance policy - deductible, copayments and coinsurance, and out-of-pocket maximum.


> Deductible - what you have to spend for covered services before costs are charged to your insurer(excluding preventive services)


> Copayments and coinsurance - what you pay whenever you use a medical service after you have reached your deductible


> Out-of-pocket maximum - what you must spend for covered services within a single year; as this amount is reached, the insurer will pay the entire cost for all covered services you use.


Estimating Total Yearly Care Costs 


To choose a plan based on your total care costs, you have to estimate the medical services you will probably need for the incoming year. Nobody expects you to know the exact amount, but you can make a projection based on how the previous year went or how the year head may go based on your current condition.


As you may know, different companies offer different health plans having unique features and varying prices. Of course, plans with higher premiums tend to pay a bigger chunk of your health care costs, while those with cheaper premiums often pay less. How do you know which category is right for you?


If you're not taking any regular prescriptions or anticipating using medical services in the near future, you can go with a less expensive plan. Note though that while it has a low monthly premium, the deductible can be high, with insurer paying less of your medical care costs.


If you want more coverage, you can simply move up to a more extensive plan, which is, of course, a little pricier. Most probably, premiums will not be cheap but they will be affordable, deductibles will be moderately low, and you'll get better coverage for out-of-pocket costs.


If you anticipate frequent visits to the doctor or need prescriptions every now and then, you can choose a plan with greater coverage. Naturally, this will require a higher monthly premium, but a bigger portion of your costs shouldered by the insurer when you need care.  Lastly, you may consider catastrophic insurance, which is a type of fee-for-service Health Insurance Innovations policy made to protect you against disasters.



These policies are sometimes called high-deductible health plans because of their low monthly premiums in exchange for their substantially higher deductible, read more here!