Thursday, 1 April 2010

The widely-discussed reform of healthcare industry in the US owes much of the stir around it to the simple fact that having your health insured in our country isn't affordable for millions of people of different demographic groups. In other words, it's just too expensive to be within the family budget of most US citizens. But how much does it cost to get your health insured these days, anyway?

This strongly depends on several factors that may vary your cost significantly. Things like your health condition, age, workplace, location, income and other live factors play a very important role in shaping your final rates. Not to mention the provider you're getting your coverage from. The form in which you get your health insured also plays a crucial role, because getting your insurance in a group from your employer usually costs less than if getting it on your own.

But what comprises the final insurance costs?

Many people get confused by the fact that there are more elements to insurance costs than just the rates you seen when quoting your price. Here are the most important of them:


Premiums are periodic fees (usually, monthly) that have to be paid to the insurance company for receiving any medical services under your plan. If you have an individual plan then you are paying your premiums on your own. If you are covered under a group plan at work, your employer pays the premiums, usually requiring you to pay a small part of this amount. Premiums depend on your health condition, your age and your income status. Premiums also vary significantly between insurance companies, so you'd better spend some time on comparing health insurance quotes before you sign your plan.

Out-of-Pocket expenses

Out-of-pocket expenses are all the additional costs of health insurance plans that are extended beyond premiums. These usually include deductibles, co-payments and co-insurance. With some plans these expenses can be limited to a maximum amount, while other plans have no limitations at all, so be on the lookout for that.

Deductible is the amount of money you have to pay on an annual basis before your actual coverage kicks in. You will most commonly encounter them in PPO plans for the services received outside the network. And as with other types of insurance products, you will have to pay lower premiums if your deductible is higher.

Coinsurance is the part of the medical cost you have to meet after paying the annual deductible. It is usually 20-30% of what you pay for the services when going to the doctor.

Co-payments represent a fixed fee for certain services within your plan. In many HMO and PPO insurance plans co-payments are set for things like doctor's visit or prescription medications.

And what are the average costs?

  • Across the US, the premium is $2,985 for individual health insurance and $6,328 for a family plan.
  • The annual premium differs significantly between states. If a family in New York had to pay $13,296 as an annual premium, the very same plan in Iowa was worth $5609.
  • The amount of deductible paid has a strong effect on the annual premium. A family plan that had no deductible had a premium of $12686, while a $10,000 deductible shed this amount more than in half, with $5380 to be paid.

Posted by Posted by roomen insurance at 17:08
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