Everything You Need To Know About Premiums & Deductibles

everything you need to know about premiums & deductibles text overlaying image of a man thinkingThere are a lot of moving parts involved in health insurance. As well as a lot of terminology to learn in order to understand your plan and its costs. Two of the most important terms to understand are premiums and deductibles. These are the two out-of-pocket expenses associated with your health insurance plan that will end up costing you the most money. Understanding  these two terms, the difference between them, and how each operates will help you to better choose the best plan for your budget. Below we’ll explain how these two health insurance costs are interdependent and have an impact on each other. 

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Premiums

Like a Netflix or Spotify subscription, premiums are a monthly payment you make to maintain a service. In this case your health insurance plan. If you purchase an individual plan on the Health Insurance Marketplace, you will pay your premiums in their entirety. But you might be eligible for subsidies or tax rebates. If your employer offers a group health plan, the cost of your health insurance premiums may be partially or entirely covered by your employer.

 

How much you pay in premiums will vary based on several factors. Such as the policy you choose, the number of people in your family, and the insurance company you go through. In addition, when determining your premium, insurance companies may take into account factors such as your age, where you live, and whether or not you smoke cigarettes. For instance, because healthcare costs are assumed to increase with age, premiums for older adults are higher.

Individual vs. Family Health Plan Premiums

Premiums for individual health plans and family health plans function in the same way. There is only one payment required each month, so the cost itself is the only difference. The cost of your premium will be higher the more people who are covered by it. But, if you do the math, you might find that you’re paying less per person for a family plan than you would if you all had your own separate plans. 

 

The only time this might not be the case is when someone in your family has significant health issues and another person rarely sees the doctor. In this case, it might be better to find plans that have lower premiums and higher deductibles for the healthier family member. And a plan with higher premiums and a lower deductible for the family member who needs more medical care. Let’s see why by taking a closer look at how deductibles work. 

Deductibles

In most cases, your insurance plan will have an annual deductible. Which you will have to meet before your health insurance begins paying for any of your medical care costs.  “Meeting” your deductible means that you will have to pay that amount in covered expenses to get coverage for anything other than preventive care. So, if your plan has a $2,000 deductible, for example, you’ll have to pay $2,000 out-of-pocket for things like lab work, minor surgeries, tests done at your doctor’s office, etc., and then your insurance plan will begin covering those things. 

 

There are a variety of ways deductibles can work, and which medical expenses will count towards meeting them. Health insurance policies for individuals and families may include a deductible structure. In which the insurance company is not obligated to pay for services until the deductible has been met. But in some cases, a plan may cover some medical expenses before the deductible is met while excluding others. In addition, certain expenses like copayments won’t count towards your deductible.

Individual vs. Family Deductibles

Health insurance deductibles can either be applied per person or per family. The way individual deductibles work is fairly straightforward, while family deductibles can be a bit  more complicated.

 

  • Individual – First, the easy part. If you have an individual health insurance policy, the money you spend on qualified medical expenses will count toward meeting your deductible. Once your plan’s deductible is met, you and your insurance company will begin dividing the remaining costs. Meaning you will pay what’s known as “coinsurance,” or a certain percentage of each bill. You’ll do this until you reach your policy’s out-of-pocket maximum.
  • Family – This is where things can get confusing, because your plan might have both an individual deductible and a family deductible. There are two main categories of family deductibles: embedded and aggregate. An aggregate deductible works the same as an individual deductible. Your plan will have one deductible, and everyone on the policy will be paying towards it. 

Embedded deductibles, though, is where the confusion sometimes comes in. With an embedded deductible plan, there is both a family deductible and an individual deductible. So, each member of the family has a separate deductible in addition to the family’s deductible. Once a family member’s deductible is met, the insurance policy begins covering 100% of that person’s healthcare costs. Everyone else in the family will still have to meet their own deductible after that member’s deductible is met. 

 

In addition, there is also a family deductible with these plans. And all family members will begin to have their expenses covered once the family deductible is met. Everyone will have to only pay their coinsurance until the out-of-pocket maximum is reached, once the family deductible is met.

 

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Costs

The cost of your premiums and the amount of your deductible will depend on a variety of factors. It is difficult to give an accurate estimate of what you’ll pay without knowing your unique circumstances. Wut we can say that the average monthly premium price in the country is $456 per month. 

 

Check out our state-by-state health insurance guides to learn more about how the health insurance market is regulated in your state. And to get a baseline estimate of the costs. You can also learn more about the health insurance plans that are available in your state. As well as ways to reduce the cost of your coverage.

 

As for deductibles, the average nationwide deductible amount depends on the metal tier you choose for your plan: Bronze, Silver, Gold, or Platinum. Keep in mind, lower deductibles mean a higher premium.

The average annual deductible amount for each tier is as follows:

 

  • Bronze – $7,482
  • Silver – $4,890
  • Gold – $1,650
  • Platinum – $745

How Premiums and Deductibles Work Together

Insurance premiums and deductibles are interrelated costs. Your plan’s premiums will be higher if the deductible is lower, for example. So, generally, your plan will either have a higher monthly premium with a lower deductible, or a lower premium with a higher deductible.  

 

If you’re wondering which type of plan would be better for you. Consider that a higher premium with a lower deductible would be more appropriate for someone who has a pre-existing condition and needs to see the doctor frequently. And if you don’t often see the doctor or generally spend a lot on medical services, having a higher deductible won’t be as much of an issue for you. And you might be better off spending less on your premiums.

FAQs

  • How can I lower my premiums?

If you have individual coverage, and your household’s annual income is less than or equal to 400% of the federal poverty level, you might be eligible for subsidies or tax rebates. Which can lower the price of your premiums. If you have group health insurance through your employer, they might offer you reduced health insurance premiums or other incentives if you are able to meet certain health and wellness criteria.

  • What will increase my premiums?

Your health insurance premiums may increase for a variety of reasons. Including but not limited to inflation, adding family members to your plan, and relocating to an area with a higher cost of living. It’s also possible that your monthly health insurance premiums will go up if you opt for a plan with more generous benefits. Consider the policy’s premium in light of its benefits before making your decision.

  • Are premiums tax deductible?

If you have a plan through either the federal or state Health Insurance Marketplace, your premiums are tax deductible. If you’re self-employed, health insurance premiums are tax deductible. And you may also be able to deduct the premiums you pay for long-term care insurance. Before submitting a tax deduction claim, you may want to consult a tax expert.

  • Is a high or low deductible plan better for me?

If you do not anticipate having many medical expenses during the next plan year, selecting a health insurance policy that has a high deductible could give you the best value. When you anticipate having a lot of medical expenses in the near future, such as if you plan on having a baby, selecting a plan with a low deductible could help you get the most value out of your coverage.

  • What does “no-charge” deductible mean?

If you have a plan with a “no-charge” deductible, your plan will pay 100% of eligible medical expenses after you meet your deductible for the year.  No-charge deductibles tend to be higher. But if you plan on using a lot of medical services for the year, it might balance out when you are no longer required to pay anything out-of-pocket.

How EZ Can Help

EZ.Insure provides access to local, highly trained insurance agents. Who will shop around for the best policy at the most affordable price. We can save you hundreds of dollars a year by searching both on and off the Marketplace for a plan that fits your needs. We can also find out if you’re eligible for any local discounts. And then apply them to your plan for you. And the best part is that we do all of this for free! To find out how much you could be saving, simply enter your zip code on the box below for free, instant quotes. Or call us at 877-670-3557 to speak to an agent who can answer all of your questions and find you the perfect plan.

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Can I Have Two Health Insurance Plans?

can i have 2 health insurance plans? text overlaying image of a woman sitting on the floor thinkingFinding one insurance plan that’s right for you can seem like a big task. But in some cases, you might actually be wondering if it’s possible to have two health insurance plans. And the answer is yes: it is possible and legal to have two policies, a primary and secondary health insurance policy. And while it might seem like a lot of extra work to research and maintain two plans, having two different health insurance plans can actually help you save money on the overall cost of your medical care and treatment.

 

With that being said, having two plans can also mean paying twice as much each month for your premiums. As well as twice as much for your deductible. So if you are considering purchasing additional coverage, you’ll need to give serious thought to whether or not enrolling in a second health insurance plan would be the best option for you.

 

To help you make this decision, we’ve broken down how primary and secondary insurance policies work. So you can understand the difference and get a better idea of how two policies could work for you. And, as always, if you have any questions, or need help looking for the right policy – or policies – for you, contact an EZ agent!

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Primary Insurance

Your primary plan will be the plan that will first cover any necessary medical care. This plan will pay before your secondary insurance plan kicks in. For instance, if you need to see a doctor or buy prescription drugs, your primary insurer will cover the costs of these services up to the coverage limits that it provides. Remember, though, as with any health insurance plan, you may still be responsible for cost-sharing, like coinsurance.

Secondary Insurance

In most cases, if you have a secondary insurance plan, it won’t begin to pay out benefits until after your primary insurance plan has exhausted its available coverage. After your primary insurer has paid its share of your medical costs, your secondary plan will begin to take effect to cover any additional costs that remain.

How to Get Two Plans

Getting secondary health insurance is similar to getting primary health insurance, but there are some differences to keep in mind. Here are the steps to getting a second policy:

 

  1. Assess your primary policy – Review the policy documents for your current plan to find out what services are covered, how cost-sharing works, and what coverage limits there are. Think about your current and future health needs to find any gaps in your coverage. 
  2. Research secondary options – Options for secondary coverage range from plans that cover just one type of health service to plans that cover everything. Find out what kinds of plans are available to you and choose the one that fills in the gaps in your current coverage the best.
  3. Understanding coordination of benefits – People can’t choose which of their two health plans is the “secondary” one. Before you sign up for another plan, make sure it will pay after the one you already have. 
  4. Apply and purchase – To sign up, follow the instructions for the plan you’ve chosen. Fill out the forms carefully and be ready to answer questions about your current health insurance. Pay your first month’s premium after getting approved for coverage.

How Does Having Two Plans Work?

When you have a medical bill, the first insurance that pays out is your primary insurance. It will pay up to its coverage limits. Then your secondary insurance will kick in and can pay part or all of the remaining costs. Please be aware that there are limits to the coverage provided by both the primary and secondary insurance. If the secondary insurer does not pay in full, the remaining balance will be your responsibility. Therefore, it is possible that you will have some remaining out-of-pocket medical costs. Even if you carry multiple health insurance policies. 

 

There is a good chance that a Coordination of Benefits clause is included in your health insurance policy. This clause will lay out the predetermined order of how your plans will pay for your covered services. So, in the event that you or your medical provider file a claim for your care, the Coordination of Benefits document will specify which plan is accountable for making payments. 

Examples of Primary and Secondary Plans

So, if you have more than one insurance policy, which policy is considered primary and which is considered secondary will be determined by your circumstances. The following are some examples of how primary and secondary plans work for different groups of people:

 

  • Married Couples – Say a wife has her own insurance but she is also covered under her husband’s group insurance from his job. The wife’s primary insurance would be her individual plan and her husband’s group coverage would be the secondary.
  • Minors under 26 – Under the Affordable Care Act, dependents can remain on their parents’ insurance until age 26. This means that an adult under this age could get their own health insurance policy from their employer while still being covered by the family policy. If that’s the case, the child’s health insurance would be the primary plan. And the parent’s would be the secondary plan.
  • Parents with separate plans – Say you are under 26 and still on your parent’s health plan. If they both have separate plans and you’re listed on both of them, you have dual coverage. The primary and secondary coverages are determined by a “birthday rule”. Meaning whichever parent’s birthday is earlier in the year will give you your primary insurance. And the one with the later birthday will give you your secondary plan. For example, if your mom’s birthday is in January and your dad’s birthday is in March. Your Mom’s insurance would be your primary coverage. This isn’t about which parent is older – the birth year doesn’t affect the order, only the birth month.
  • Medicare beneficiaries with group health plans – If you are 65 or older and on Medicare, but are still working and have insurance through your employer, Medicare will be your primary insurance if the company you work for has fewer than 20 employees. If your company has 20 or more employees, your group plan will be primary and Medicare will be secondary.

 

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Out-Of-Pocket Costs

The cost of having two plans will generally be higher than the cost of having one plan. Since you will have to pay the premiums and deductibles for each of your health insurance policies. For example, consider this: you will not be able to use your secondary coverage to cover your primary’s deductible. You will also have to pay any copayments and coinsurance that are associated with each plan.

 

It’s also important to note that the rules of your primary plan will apply to both of your policies. So, for example, if your primary plan is a PPO plan. Your primary policy may stipulate that you can only use certain doctors and hospitals in your plan’s network. Your primary insurance won’t pay anything if you go to a doctor who isn’t in their network. The secondary insurance won’t either because you broke the primary plan’s rules by going to an out-of-network doctor.

 

In addition, if your provider charges you more than what your plan(s) considers to be reasonable, customary, or allowed under plan rules, you may have to pay the difference. A licensed insurance agent from EZ can help you understand the out-of-pocket costs associated with each of your plan options.

Weighing Your Options

There are positives and negatives associated with choosing to have a primary and secondary insurance plan. Just as there are with any other type of insurance. Let’s take a look at the pros and cons to help you decide if having two plans might be right for you.

Benefits

  • Extra Coverage – Having two plans could come in handy in the case of unanticipated medical expenses. And if you find that you frequently have to pay for your own medical expenses out-of-pocket, it may be beneficial to purchase a secondary health insurance policy.
  • No Gaps – Even if one of your health insurance policies lapses, you won’t experience a gap in coverage if you have a second plan. Your secondary health insurance will just become your primary automatically.
  • Complementary coverage – Having plans that are complementary, that cover different elements of your healthcare, will mean you’ll get more coverage and better benefits. You’ll be able to make up for what your primary health insurance doesn’t cover with your secondary plan.

Disadvantages

  • No guarantee – Even if you have two separate health insurance policies, your out-of-pocket costs may still not be covered in full. Keep in mind that the amount of your plans’ coverage cannot be more than the amount of your out-of-pocket expenses.
  • Extra expenses – Your two separate health insurance policies will still require you to make payments on the associated premiums and deductibles. This may result in additional expenses further down the road.
  • Overlapping – It’s possible that your coverage from two different health insurance plans will actually overlap if the plans are too similar to one another. Meaning you will not receive as many additional benefits as you might like.

FAQs

  • What is the birthday rule?

When children are covered by both parents’ health insurance policies, the birthday rule plays a significant role in determining which plan provides primary coverage and which provides secondary coverage. According to the birthday rule, whichever parent’s birthday falls earlier in the year will be the primary insurer. Secondary insurance is provided by the other parent’s plan. The year of birth of each parent does not come into play.

  • How do I know which is my primary insurance?

You don’t get to choose which plan will be your primary coverage and which will be your secondary coverage. Whenever you file a claim, your primary health plan will cover you as if you didn’t have a secondary plan. After that, your secondary health insurance will cover the rest of the bill. If you have two health plans, there are rules about how your benefits will work together. Some of these rules will be different for you based on your health insurance company and your situation.

  • Is having 2 plans worth it?

It depends. Having two health plans can save you money if one is free or both are inexpensive. Also, it’s best to make sure they work well together. Check to see if their coverages and benefits overlap or are too similar.

EZ Is Here to Help

Having both primary and secondary coverage can be complicated. It could work for you, but you’ll need to weigh the pros and cons carefully before deciding whether or not to invest in a secondary insurance policy. Feel free to ask EZ anything. Including if having two plans might be right for you, as well as for assistance in locating a secondary health insurance plan, if necessary. We will compare plan benefits and costs for you. And will assist you in locating affordable coverage that meets your needs. Simply enter your ZIP code below to get started with free, customized quotes right now! You can also give us a call at 877-670-3557 to have a qualified insurance professional discuss your needs and help you choose the best policy for you.

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Medicare Part B Premiums to Drop 3% Next Year

The government has finally announced the new standard monthly premiums for Medicare Part B. And after all the speculation about rate hikes, rates will actually be decreasing a little bit next year. Not only that, but the annual deductible for Medicare Part B will also be lower next year. With many Medicare beneficiaries struggling with increased healthcare costs, this decrease in rates should be helpful. So what will you be paying for Medicare Part B in 2023?piggy bank on a calendar with money sticking out of it and article title written across

Medicare Part B Premium

The new standard monthly premium for Part B will be $164.90 next year, which is about 3% lower than it is this year.  

2022 saw a large increase in Medicare Part B premiums because of projected spending on Aduhelm, a new drug for treating Alzheimer’s disease. Now that spending on the drug, and other treatments and services, has gone down, Part B once again has more financial reserves. This is allowing Medicare to lower next year’s premiums for Medicare beneficiaries.

Medicare Deductiblesblack envelope filled with money

Medicare Part B premiums are not the only costs that are going down. The annual deductible for Part B will be $226 for 2023, which is a $7 decrease from $233 in 2022.

But while the Medicare Part B deductible is going down, the deductible for Medicare Part A will go up $44 from this year’s $1556, making it $1,600 in 2023. For the 61st through 90th day of hospitalization, coinsurance will be $400 per day, up from $389 this year. For lifetime reserve days, the charge will be $800 per day (up from $778 in 2022).

IRMAA Changes

Income-related adjustment amounts, or IRMAAs, will kick in for single beneficiaries at the modified adjusted gross income amount of more than $97,000, up from $91,000 this year. For married beneficiaries filing a joint tax return, the extra monthly charge will apply if income is above $194,000, up from $182,000 this year.

Want To Save More?

If you need help paying for the things that Medicare doesn’t cover, you have the option of purchasing a Medicare Supplement Plan. Your plan can help pay for the things that Medicare does not, including the 20% coinsurance that you will have to pay out-of-pocket for every Part B expense. One of these plans could cover 100% of your Part A coinsurance and hospital costs, as well as 100% of Part B coinsurance and copayments, for one low monthly premium price. 

 

There are 10 different Medicare Supplement Plans to choose from, each offering different coverage options and rates. It’s worth looking into a Medicare Supplement Plan to save as much money as you can, so speak to an EZ agent for all of your options. EZ’s agents work with the top-rated insurance companies in the nation and can compare plans in minutes for you at no cost. To get free instant quotes for plans that cover your current doctors, simply enter your zip code in the bar on the side, or to speak to a licensed agent, call 888-753-7207.

Business Insurance Costs That’ll Keep You Up at Night

Insurance costs can surprise you, and purchasing policies for your company can run into stormy waters. With a good understanding of the costs and ways to save money, you can sail your company’s ship straight to profitable seas. Insurance costs, or those “life happens” moments, crop up when you least expect them. Proper planning will alleviate the strain these cause.  The average company spends about $1300 on policies, but plan prices are increasing steadily for years. Don’t let unknown factors cost you capital.

stack of insurance folders for a business
The information n insurance costs can really stack up. We’ve got these easy outlines for you to follow.

 

 

When it comes to insurance for your business, certain forms of coverages are mandatory like Worker’s Compensation, but you should be aware of what will raise your costs, and where are the places you can save money.

 

Cost-Raising Factors

Different things influence your final price. Learn them now:

 

  • History of claims – Your company’s past will be brought up at some point from the insurance perspective. If you have past claims, make sure you are up to date on them and still have their information.
  • Profit Margin – Your final sales numbers will be taken into account. These directly affect how much coverage you need plus your ability to afford it. If you have a high-profit margin, you’ll want to protect your interests.
  • Physical Property – If you have a physical site with assets, this will directly affect your Business Owner’s Policy. Remember, a larger building will require more coverage.
  • Physical Location – Different states have different insurance laws, and some have scarier premiums. Your physical location will be a big determining factor across the board.
  • Employee Number – Whether you’re self-employed or have a staff, this number dictates when and why you need coverages like Group Health insurance.
financial analysis of business
Technology can help out too. There’s an app pretty much everything out there.

Of course, take your business’s specific needs into account, but those vary widely based on industry. Your insurance liaison (known as an actuary) will calculate your risks before offering you different options and their price. Now, how can you reduce these costs?

 

Places to Save Money

 

Here is the good news. There are many ways for you as a business owner to cut your expenses. Take these three factors into account:

    1. Deductibles – When tax season comes about, this is the best time to minimize the payment you are expected to make. Write everything down during the year, including claim payments, so that they count toward a lower final number. Remember, business expenses count towards a tax refund.
    2. Bundling – Grouping things like policies together can save time and money. Often, an insurance company will offer a better deal if you’re willing to only purchase your policies with them. Consider your options when doing this, because it’s a lot less stressful to only look in one place for your information.
    3. Refreshing your info – New updates happen in the insurance industry all the time, and your business should also be constantly evolving. If you set one price down for yourself, you may lose out on a better option later. If nothing else, calling your provider and updating your company’s information may give them a better perspective on how they can help you in the future. New coverage may arise that they didn’t know they could offer you.

 

 

Coverage comes with responsibility. As a business owner, it’s your job to make the best choices to grow. Your employees and customers are counting on you. With these factors in mind, you can look into where to best allocate your assets. However, everyone can use a helping hand, especially when the industry is as complicated as insurance. 

tax incentive form and other business insurance paperwork plus a blue mouse, pen, and cup
Keeping track of everything can be exhausting. Make sure to keep accurate documentation and get help when you need it.

 

EZ.Insure is ready to be that helping hand. Your agent will answer any questions you have, compare the plans for you, and even sign you up, free of charge. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing replies@ez.insure or calling 888-998-2027. EZ.Insure makes the entire process easy, and quick.