insurance

5 essential facts about health insurance

The premium isn't everything
The premium isn't everything © Constantine Pankin/Shutterstock.com

Every health insurance plan includes a number of variables, so just looking at the monthly payment, or premium, doesn't tell the whole story.

To determine whether a plan fits your situation, you must understand the big picture. That includes the annual deductible, which is the amount a consumer must pay out of pocket before the insurance company will pay any expenses.

"If you are a healthy person, there is no reason to have a deductible lower than $5,000," says Ashley Hunter, president of HM Risk Group, a niche insurance brokerage serving the U.S. and the Middle East.

"Purchase a policy with a higher deductible and an option that allows you to have at least two doctor visits with a copayment for emergencies," she says, adding that you might then invest your premium savings.

People who seek health care regularly should look for a low copayment, which is a fixed out-of-pocket charge for medical services.

"We find that if you tend to use your health insurance, it is almost always cheaper to take a higher-cost plan with the lowest out-of-pocket expenses," says John Seltzer, founder and CEO of J. Seltzer Associates, a Pittsburgh-based insurance brokerage specializing in employee benefits.

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