Health Insurance Center

Health Insurance Q & As

Question 2 of 4 in Considerations When Buying Health Insurance Purchase
What variables will affect my insurance premium?
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.