What’s a Co-Pay Again? Demystifying Health Insurance

Health Care CostMany people have to choose their health insurance this time of year, and the terms you hear about when looking at plans can be very confusing.  But understanding those terms can be the difference between make the right choice and getting it very wrong.   

The first term you should know is “co-pay.” A co-pay is your portion of the payment for a healthcare service.  For example, your doctor visit may cost $100 and your co-pay may be $10.  That means you will pay $10 per visit and your insurance will pay $90 (or whatever price the insurance company agreed to pay).

Many people are confused about the various terms used when they choose which insurance to buy.  In addition to a co-pay, you need to know what your “monthly premium” is.  For example, you may pay $150 permonth for healthcare coverage (your premium); however, you may still have a co-pay for some healthcare services.

You will also want to know what your “deductible” is.  A “deductible” is the amount you have to pay each year before your insurance will begin to pay for your healthcare services.  If you have a “high deductible,” you may have to pay $3000-$5000 out-of-pocket before your health insurance will pay for certain services.

When you are evaluating which insurance to buy, you need to know each of these numbers in order to figure out which insurance is best for you.  For example, if you are very healthy, you may want to pick a plan with a high deductible since you are unlikely to need many healthcare services.  Insurance Plans that have high deductibles normally have a lower monthly premium.

All of this information and more will be explained in MyHealthSpin’s soon-to-be-released book, Easy Healthcare:  Choose Your Health Insurance.  For more information,  go to myhealthspin.com.

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