What insurance terms should I know?
Deductible: The amount of money you pay toward medical expenses before insurance will begin to reimburse you.
Premium: The cost of your insurance policy, usually charged monthly.
Coinsurance: The percentage of a medical bill that you must pay. Your insurance policy covers the remaining percentage.
Copay: A flat dollar amount you'll pay your healthcare provider for a covered service. Your insurance policy covers the rest of the bill.
Out-of-pocket maximum: The maximum amount of money you will pay for covered services during a benefit period (for example, over the course of a year).
What do I need to know to purchase insurance?
Step one: Educate yourself
- Individual health insurance is insurance that someone purchases personally for themselves or their family—not insurance provided through an employer.
- There is a basic trade-off in the out-of-pocket cost when you get care vs. monthly premium costs. The lower the premium, the more you'll pay at the time you receive care, and vice versa—the higher the premium, the less you’ll pay at the time of care.
- Enrollment periods may apply when you are purchasing individual insurance. Open enrollment typically falls between November and December each year.
Step two: Evaluate your budget
Make a list of all of your known medical expenses so you can choose a plan that best covers those costs.
- Are you planning on expanding your family in the coming year? Are you managing any chronic illnesses? Do you need to have surgery?
- If you are in good health, a high-deductible health plan (HDHP) could be a good option for you because it offers lower premiums. The catch is you’ll pay out of pocket for any medical needs until you hit your deductible.
- If you have chronic illnesses or know that you need monthly medications, a higher-premium plan with lower out-of-pocket costs may be a better option.
Step three: Choose your coverage
Decide if it’s important to you to keep your doctor.
- When searching for policies, keep in mind that different policies will have different providers. Make sure you choose one that your doctor participates in if it’s important to you.
Make sure you're covered in unusual situations.
- If you split time between states, consider a multistate policy or a policy with a national provider network.