When it comes to buying health insurance, there are two main factors to consider: what the plan offers, and how much it costs. People confuse the two terms “premiums” and “deductibles.” These two are the most out-of-pocket expenses you pay for your health insurance plan. It is important to understand the two, the difference, and how they work.
The two payments go hand in hand and affect each other’s costs. Finding out the difference between the two can help ease picking a health insurance plan.
What Is A Premium?
Premiums do not go towards your deductible. A premium is the fixed monthly rate that you pay for the insurance company to cover you and your family. The premiums are dependent on a couple of factors though. Most insurance companies will underwrite you first, which means that they gather all your health conditions and determine how much of a risk you are. Other factors include your age, lifestyle, and sometimes where you live. Then you are given a monthly premium price matching all the calculated factors. Compare plans between different companies so you can get the best coverage and price.
What Is A Deductible?
A deductible is a fixed amount you must pay before the insurance company begins covering you. You are responsible for paying the bills that you accumulate before your insurance coverage kicks in. For example, if your deductible is $1,500, and you go to the doctor and get a procedure done, then you are responsible for the first $1,500 of that procedure. The insurance company will cover the rest. It does not have to be paid all at once due to a procedure; it can accumulate over time. This includes blood work that may be $500, following another couple of bills. It must all accumulate the $1,500. After your deductible is met, the insurance company pays for the rest of the year.
Deductibles can range anywhere from zero to thousands of dollars. Some companies will provide services that are
covered without having to pay a fee towards your deductible. The services can be routine care, and will only have a copayment.
How It Works
Deductibles and premiums work together in a way. A plan with a low deductible will have higher premiums. You can choose to pay high premiums with a low deductible, or low monthly premiums with a high deductible. You should base your decision on how healthy you are because the healthier you are, the less likely you are to go to the doctor or have to pay your deductible. If you are someone with a pre-existing condition and need to see the doctor often, then a higher premium with a low deductible would be a better fit.
One company may consider you a high risk, while another considers you a moderate one. This will affect pricing on your premiums. It pays to compare companies and their quotes.
EZ.Insure offers trained agents within your region that will do all the comparing of quotes and coverage of insurance companies in your area. There is no fee for this service, EZ.Insure offers it to you free. If you would like to get started on some quotes of premiums and deductibles, reach out to an agent by calling 888-350-1890 or emailing replies@ez.insure. You can also get instant quotes by entering your zip code in the bar above. Let us do all the work for you, for free!
