Understanding health insurance costs makes for better decisions

When you buy a car, you probably think first about price — your monthly payment. But other expenses — like auto insurance, gas, and maintenance — can affect your wallet. Your total costs depend on which car you buy and the expenses that come with owning a car.

Health insurance can be like that. If you look only at your monthly payment, you may find that other costs have a big impact on your household budget.

Image: {Woman considering all health care costs including premiums, deductibles, copayments}

Total yearly costs

It’s useful to think about your total yearly health insurance costs.

  • Premiums: What you pay your insurance company every month — your “monthly payment.”
  • Deductible: The amount you have to pay before the insurance plan starts to pay its share. With a $ 900 deductible, you pay the first $ 900 of costs yourself. After that, the company starts to pay its share.
  • Copayments and coinsurance: What you pay (a dollar amount or percentage of costs) when you get care after your insurance company starts paying.

Note: All plans provide free preventive care (including child checkups and vaccinations, well-woman visits, and more). And most plans cover some services before you hit your deductible, like discounted drugs, periodic checkups, and services to help you manage conditions like asthma or diabetes. You also get discounted prices from network providers from day one.

Your total yearly health insurance costs depend on how much care you use

  • If you don’t expect to use much care during the year, or if you have insurance mainly for protection against really high bills and for preventive care, looking mostly at your monthly premium may be right for you. You’ll pay a low premium but face high costs when you use care.
  • If you expect to use regular care, or a lot of care, a plan with a higher premium may be a better overall deal. Plans with higher premiums usually have lower deductibles, copayments, coinsurance, and out-of-pocket limits. So even if you pay more each month you may save money overall.

We help you figure out your total health care costs

  • When you preview plans and prices or shop for plans, you can pick a level of care you think you’ll need for the year.
  • When you compare plans we’ll show you “total estimated yearly costs” — including premiums, deductibles, and copayments/coinsurance — for each one, based on the level of care you expect. Then you can compare the real costs of health insurance side-by-side.

Get more information about your total health care costs.

Health Insurance Blog – Healthcare.gov