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Costs of a policy

When you're thinking about purchasing a new health insurance policy, you should consider what you'll pay for your insurance policy, including deductibles, copays and covered and uncovered care.

Sometimes the policy that has the lowest premiums can wind up costing you the most money out-of-pocket for medical expenses, depending on your overall health care needs.

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Premiums

This is the amount paid to your employer, broker/agent or insurance company for health care insurance. The premium is usually paid every month. Many employers pay part of the premium for their employees and deduct the employee's portion from their paycheck.

Deductibles

The deductible is the amount of money you must pay out-of-pocket before an insurer will pay any expenses. Some plans have more than one deductible, such as one for prescriptions and another for medical services. Not all medical costs apply to the deductible. For instance, some policies may not allow a chiropractic visit to apply to your deductible.

Out-of-pocket expenses

The costs you're responsible for because your health insurance plan doesn't cover them.

In-network vs. out-of-network

Your insurance company may negotiate with some health care providers for lower rates. These providers are in-network and it will cost you less in deductibles and copays to see them. If a health care provider is not in your health plan, they are out-of-network and you will usually pay more to see them. The amount your insurance plan pays is usually much smaller, and sometimes they may not pay anything for out-of-network providers.

Copays

The copay is the amount you pay out-of-pocket for a health care service. It's usually a fixed amount and you pay it when you receive the service. For example, if your health plan has a copay of $25 for a doctor visit, you'll have to pay that at your appointment. Your health plan will usually pay for the rest of the visit.

Coinsurance

Coinsurance is similar to a copay, except it's a percentage of costs you pay. For instance, you may pay 20 percent of the cost of a $100 medical bill. So you would pay $20 and the health plan would pay the rest.

Noncovered services

These are treatments, services, supplies and expenses that your health plan doesn't cover. An example might be cosmetic surgery that is not medically necessary, such as making a nose smaller because the patient thinks it's too big. Noncovered items vary by plan, so if you have questions about whether or not an item is covered, be sure to check with your health insurance plan or employer's benefits administrator.

Out-of-pocket maximum

This is the total you have to pay each year for most of your covered services. This amount does not include your premiums. Each family member has an out-of-pocket maximum and some policies have a combined family out-of-pocket maximum as well. Once the maximum is reached, you don't have to pay most out-of-pocket costs for the rest of the year. When looking for a policy or verifying your current benefits, you will want to know what costs apply toward your annual maximum. Cook Children's may ask for your out-of-pocket portion at the time of service.
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