I’m trying to sign up for health insurance. And I don’t understand at all what are monthly premiums, out-of-pocket costs, deductibles, and any other lingo. Can anyone PLEASE explain this to me like you would to a 5 y/o?
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Monthly premiums are the amount you have to pay, typically deducted from your paycheck, to access the medical benefits. If it is not paid then you no longer have the benefits. Your deductible is the total amount of money you have to pay before the insurance pays any amount. Once your deductible is met, then you have coinsurance or a percentage that the insurance pays. An example would be an 80%/20% split where the insurance pays the 80% and you pay the 20%. The other out of pocket cost would be co-pays. That is a flat dollar amount that you pay per service that does not apply to the deductible, but does apply to the out of pocket maximum. Your out of pocket maximum is the total amount you will have to pay until the insurance will cover 100% of the cost. This includes your deductible, co-pays, and coinsurance, but does not include your premium. Also, please note that the out of pocket maximum for your medical coverage may or may not include any prescription costs and 100% is really only guaranteed if it is an in-network provider.
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