Total Cost Estimate of Coverage: Key Terms to Find Your Best Value

(An excerpt from Obamacare? Marketplace? The Exchange?: A Comprehensive Guide: Part 2: Apply. Compare. Enroll COMING SOON!)

What does Health Insurance Marketplace® insurance cost per month? How much should I expect to pay?  

Factors to consider when finding your best value

Here’s the key thing to keep in mind: the monthly premium isn’t the only factor to consider when choosing a plan that is the true BEST VALUE for you. It all boils down to your personal needs and how your budget looks. Many people believe that the plan with the lowest monthly premium is always the best value option but this thinking can backfire.

As I mentioned in the OME Comprehensive Guide (COMING SOON!), plans with lower monthly premiums often come with higher deductibles. So, while you might save some cash every month, you could be caught off guard by how much you need to pay out-of-pocket to meet your deductible before your insurance starts picking up some of the costs for care and treatment.  

Additionally, certain plans may cover specific services, typically preventive care, without a copayment even if you haven't met your deductible. This information will be clearly laid out during your comparison process, but it's crucial to grasp how these elements interact first.

Before proceeding, it's important to understand a few essential terms that will help you compare plans, have informed discussions about what you’re getting from each, and ultimately find the best value for your needs. Let’s take a quick look at the costs you should keep in mind!

Key terms for understanding the actual cost of insurance:

• Premium: Amount you pay each month for your health care coverage.
• Deductible: Amount you pay for covered services BEFORE your insurance plan starts to pay.
• Copayment (copay): Fixed amount you pay for a covered service AFTER meeting your deductible.
• Coinsurance: Percentage of costs you pay AFTER meeting your deductible.

Except for premium, these are referred to as “out-of-pocket costs,” meaning expenses for care that aren’t reimbursed by insurance.

• Out-of-pocket max: Maximum amount you will pay during your coverage period (usually 12 months), after which insurance pays 100%. It is important to note that monthly premiums DO NOT count toward your out-of-pocket max.

Source: How Deductibles, Coinsurance, Copays & Premiums Work - Aetna | What's the Difference Between Them?

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