Health insurance has become more complicated as healthcare costs have increased over the years. Many costs to the consumer are embedded in health insurance policies, and knowing the nature of these obscure costs can help you decide which policy will work best for you. These include monthly premiums, co-pays, deductibles, coinsurance and coverage limits.

Monthly premiums
• Premiums can vary, however insurance companies must compete for your business, so rates tend to be similar for comparable plans.
• If you find a policy that has significantly lower monthly premiums, there could be other costs embedded in the policy.

Co-pays
• These apply to doctor visits as well as medical tests or treatments that you receive in doctors' offices. Co-pays for general physicians tend to be lower than co-pays for specialists.
• Prescription drug plans often include co-pays on medications.
• If you see a doctor and/or a specialist more than once or twice per year, consider getting a plan with low co-pays or an unlimited number of doctor visits.
• If you rarely go to a doctor, you can save money on your monthly premium by choosing a plan with a limited number of doctor visits or higher co-pays.

Deductibles
• Most people are familiar with deductibles, because other types of insurance offer lower monthly rates for higher deductible policies (auto, home owners, etc.). The challenge is to figure out how much of a deductible is reasonable for your budget if you find yourself needing expensive medical care and how much your monthly budget can bear in the meantime.
• One cost-saving option is combining a high deductible plan with a health savings account (HSA). Many health policies offer such a plan for a lower monthly premium and an agreement that you will set aside a certain amount of money each month in the HSA. The intention with these plans is that you will have the money already saved in the HSA to pay the high deductible when you need it. Another benefit is that the money you deposit in an HSA is not taxed and can be used (tax-free) for a variety of medical services.

Coinsurance
• Coinsurance means that you are sharing the risk with the insurance company. Coinsurance begins as soon as you have met your deductible, which for most people happens when serious medical treatment, hospitalization or surgery take place.
• Typically, you pay a percentage of the costs until you reach your out-of-pocket maximum. (Your part of the coinsurance is generally not more than 50%.)
• There are plans available with 0% coinsurance. With these plans, once your deductible is paid the insurance company will cover the remaining costs.
• The more coinsurance you pay (the higher your percentage and out-of-pocket maximum) the lower your monthly payment.
• Most people are not aware of coinsurance costs, and it comes as a surprise often during a difficult time. When you are researching health policies, make sure you are clear how much coinsurance you are expected to pay and the amount of your out-of-pocket maximum. Remember, you need to fulfill your deductible before you start paying coinsurance.

Coverage limits
• The insurance company may place a yearly limit on how much it will pay for doctor visits or hospitalization. Once the insurance company has paid the limit, you are responsible for any additional amount.
• Typical health policies' limits are so high that they are rarely reached. Be sure you understand the limits of your policy in case you require specialized or expensive medical care.
• Once your annual and/or lifetime limits are used up, the insurance company is no longer responsible to pay your medical bills.

Health care continues to be a controversial issue because of the high and increasing costs. When applying for a health insurance policy, the more you understand the costs to you, the easier it is to choose the right policy.

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