When shopping for Obama care plans online, it can be difficult to choose which plan may work best for you and your family, as each plan is filled with terms that can be confusing to understand and apply in a practical way. Get definitions of common health insurance terms below to help you have a deeper understanding of the plans you are looking at.
1. Premium
A premium is the amount of money you will pay to carry your health insurance plan. Depending upon your income, your health insurance plan through Obamacare may cost nothing at all, or you may end up paying a few hundred dollars per month, depending upon which plan you pick.
Higher premium plans tend to offer better benefits, which can offset their monthly cost if the person on the plan has to rely on their insurance a great deal throughout the year. At the same time, high premium plans may not be worth it for people who rarely visit the doctor and don’t end up needing the benefits their plan provides.
2. Deductible
A deductible is an amount that a health insurance plan user has to pay before the full health insurance benefits kick in. For example, if a plan for an individual has a deductible of $2,000, the individual will have to pay for $2,000 worth of services before their insurance will cover a certain percentage of healthcare expenses.
People who are generally healthy and rarely require specialist or hospital visits can often choose a higher deductible plan, as these usually come with a lower monthly premium. Those who experience more health problems may prefer to pay a higher monthly premium on a lower deductible, as their health insurance plan will cover expenses sooner than a higher deductible plan.
3. Co-pay
Some health insurance plans will still require a co-pay, or co-payment, on some health services even after your deductible is met. A co-pay is when you pay for some of your health bills and the insurance company pays some too.
Co-pays are usually a relatively low cost after the deductible has been met when compared to before the deductible has been met. For example, a regular doctor’s office visit may cost $120 before you have reached your deductible, but your co-pay after it has been met may end up only being $20 per visit.
Not all health insurance plans require co-pays, so be sure to read the fine print and see if the plan you are considering will cover all costs after the deductible, or whether it will still require co-pays on healthcare expenses.
4. Out-of-Pocket Maximum
The best part about having a health insurance plan is that there is a limit for how much you will have to pay for covered services in a given year. This is referred to as the out-of-pocket minimum, and once this figure has been reached, your plan will pay covered healthcare costs until a new insurance year begins.
Out-of-pocket maximums don’t include out-of-network care, monthly premiums, and costs associated with services your plan doesn’t cover. Each year, the Marketplace updates how much the out-of-pocket maximum is for both individuals and families. In 2021, for example, individuals can’t have an out-of-pocket maximum of more than $8,550 for Marketplace plans.
Understanding how health insurance works, and how to pick the right plan for you, can feel overwhelming at first. Once you have a grasp on the above terms, however, it becomes much easier to understand what kind of plan you are signing up for. Be sure to thoroughly investigate each of your plan options before signing up, as picking the right plan can end up saving you and your family thousands of dollars per year.
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