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  Exactly How Are the Costs Of A Health Insurance Policy Made Up?If you are unfamiliar with health insurance then the costs of a health insurance plan could seem to be a bit complicated and many people are surprised that, having paid what seems like an arm and a leg, they find themselves faced with a bill the first time that they make a claim. So before you are hit with a large medical bill therefore, it might be a good idea to take a moment to learn just what sort of costs you can expect to incur on your health insurance plan.The first and probably most obvious cost is the monthly premium or, if you so choose, the quarterly premium or annual premium. If you are enrolled in an employer's or union group insurance plan then you will normally be required to pay only a percentage of the premium and this will frequently be taken directly from your pay check. The majority of health insurance policies will also include an annual deductible which is an amount of money which you will have to pay before your insurer begins to pay out on any claims. So, with an annual deductible of $1,000 you will need to pay the first $1,000 of any medical bills each year before your insurer will start paying out. You may be familiar with the principle of paying a deductible from your experience with car insurance and, if so, will know that the more the deductible on your plan the lower your premiums will be. If you have a family health insurance plan then this will often include multiple deductibles for the individual members covered by the policy. The majority of health insurance policies will also include a co-payment which is a fixed sum of money which you will need to pay towards each medical bill. Exactly how much you will need to pay in co-payments will depend very much on the type of policy you have. For example, co-payments on HMO plans are normally lower than those on indemnity plans. In addition, the co-payment will also vary between different forms of medical service and, if you are enrolled in an HMO plan, will normally rise if you seek treatment outside of the HMO network. In those cases where a co-payment is not required you will generally find that this is replaced by co-insurance which is similar and is an amount of money, in this case expressed as a percentage, which you will have to pay towards each medical bill. A common co-insurance ratio is 80/20 meaning that your insurer will pay 80% of each medical bill while you pay 20%. As with co-payments, co-insurance will frequently rise if, as an HMO plan member, you seek treatment outside of the HMO's network. In this case you will also find that, whenever a claim exceeds what is considered by the insurance company to be 'reasonable and customary', you might be required to pay the additional cost. By this time you will see that comparing different health insurance plans is about far more than merely comparing premiums. Accordingly, it is extremely important that you read the small print of any health insurance quote most carefully and that you avoid the frequent temptation to just select the plan with the smallest monthly premium. If you want to keep your costs low and are in an HMO plan then you should attempt to stay inside the HMO's network and, where you do feel that it is necessary to go outside the HMO's network, then compare actual treatment costs to what your insurer considers 'reasonable and customary' before you undergo treatment. It is also possible to keep your costs under control on most plans by adjusting the deductible and by selecting higher or lower co-insurance. Exactly how this can be achieved is beyond the scope of this short article but is a matter of balancing the various different costs involved against the probability of needing to make a claim on the plan. Free Article Source: http://www.za77.org About The Author: MedicalHealthInsuranceToday.com provides information on all aspects of health insurance from international travel health insurance to health insurance for pre-existing conditions |