Choosing between health care plans for your family can be a daunting task, yet it’s also one of the most important decisions you can make from year to year. Good health insurance will guarantee your family is protected against medical mishap, while bad insurance can cost you a lot of money while providing few benefits. So, it’s vital to understand what you’re spending, and what you’ll be getting for your money.
Here are some tips for understanding the costs associated with your health care plan.
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There are three basic numbers you need to care about when it comes to the costs of your health insurance:
- Monthly Premiums: This is what you pay each month.
- Annual Deductible: This is how much you pay out-of-pocket for medical visits and procedures before insurance kicks in.
- Annual Out-of-Pocket Maximum: What it sounds like, the maximum you could ever pay in a year for deductibles.
Of course, from there you can also multiply your monthly premiums by twelve to get the total annual amount of your premiums. You might think of this as your minimum annual cost. No matter what, even if no one visits the doctor once all year, you will still be paying the total amount of your twelve-monthly premiums.
Another good number to calculate is your maximum costs. This is simply your total annual premiums plus the out-of-pocket maximum. No matter what happens, this is the most you’ll pay in a given year.
Once you have those numbers, you’ll have a pretty good idea what your health insurance will cost you.
So how do you pick the best value? Ideally, you want a plan with low monthly premiums and a low out-of-pocket maximum. Those will minimize the amount you’re paying in.
Of course, that’s also assuming the plan offers the coverage you want and has a care network large enough for you to take advantage of it. Be careful here! Don’t sign up for a low-cost plan until you’ve double-checked the specifics, particularly what offices are participating. You don’t want to sign up for insurance that will require you to drive across town.
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