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Question 2 of 4 in Health Insurance Purchase Considerations |
What variables will affect my insurance premium? |
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Purchasers of insurance often can control several factors used to determine the insurance premium. Some of these factors, which act as limitations of the insurance coverage, include:
• Deductibles - The amount you yourself have to pay out-of-pocket before reimbursement of your expenses from the insurance coverage. It is usually a flat dollar amount. The higher the deductible, the lower the premium.
• Co-payments and co-insurance – for example, in a 80/20 plan, the insurance pays 80% of the covered expense and you pay out-of-pocket the remaining 20%. Most plans with a co-pay have a maximum, out-of-pocket, cost.
• Lifetime maximums - the maximum amount of insurance coverage that will be paid on your behalf during your lifetime. The higher the maximum, the more coverage is potentially available under the insurance coverage.
• Annual or "out-of-pocket" limits - the maximum amount of deductible and co-payments you will have to pay each year. The lower the annual limit, the higher the premium.
• Coordination of Benefits - some insurance companies now offer insurance plans which recognize the fact that other insurance may be available to you, such as coverages under worker's compensation, automobile insurance, a state disability program, or from coverage available as an employee benefit to a spouse. This provision specifies how multiple coverages will coordinate their payments.
• Renewability/Cancellation - some insurance companies offer health insurance on a guaranteed renewable basis or with a non-cancellation provision (meaning that the insurance company may only cancel coverage in the event of non-payment of premium). Expect there to be an added cost for these features. |
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