There’s no other way to say it: Health care is expensive. As a result, we often pay more for our health insurance than we’d like to. But the good news is that understanding how costs are determined can help you find the plan that’s best solution for your health and your pocket book.
A number of factors determine how much you’ll pay each month—and each plan year—for your health care. Here are a few things to keep in mind as you shop.
Health insurance premiums: How do they work?
The monthly health insurance premium is the amount you’ll pay for your insurance every month to maintain coverage; you will pay this amount to the insurance company even if you don’t use medical services that month.
Premiums vary between health plans, but typically, a relationship exists between the amount you pay per month, and the amount you may have to pay when you actually use your insurance and get care.
Insurance is all about balancing risk and spreading it out over a large pool of insurance plan members. As a result, selecting a plan with lower premiums usually means you will pay more when you actually go to the doctor. You have less skin in the game—so to speak—up front, so you make up for it when you need care. Paying more per month in premiums can often bring your costs down when you use your insurance, since you’ve already contributed more to the overall risk pool.
If you receive health care coverage through your job, your employer will usually pay some of the monthly premium costs. Your portion of the cost is usually deducted from your paycheck.
If you are self-employed, or buy your own health insurance, then you are responsible for arranging payment each month.
What is a copayment or copay?*
A copayment, or copay, is the flat fee you pay to the doctor or pharmacy when you access health care services. The fees vary between different plans, and they vary between different services.
For example, you may have a $30 copay to see a primary care provider, a $50 copay to see a specialist, and a $15 copay for generic prescription medications. An emergency room visit is usually more expensive, having a $300 copay, for example.
Sometimes your pharmacy may be able to offer certain medications at an even lower cost than your copay amount. You will pay the lower amount, if available.
Under most insurance plans, preventive care like annual checkups, screenings and immunizations are covered at no cost (and no copay) to you. This includes some preventive medications as well.
Getting individual coverage through the ACA Marketplace
With the Affordable Care Act implementation in 2014, individuals who are not offered insurance through their jobs can purchase insurance through the marketplace exchange at www.healthcare.gov.
If your income is under a certain threshold, you may be eligible to receive help (called a subsidy), paying for your monthly premium. However, if you buy your insurance off of the exchange, through an insurance agent or directly from a health plan, for example, you are not eligible to receive this assistance.
Sanford Health Plan offers individual plans on the marketplace exchange, and off the exchange, in North Dakota and South Dakota.
*The best place to find your specific plan copayment information is in the Summary of Benefits and Coverage (or SBC). Current Sanford Health Plan members can access their SBC and other plan information in their secure member portals at sanfordhealthplan.com/memberlogin or by contacting customer service at the number listed on the back of your insurance member ID card.