Getting The Most From Your Health Insurance Policy

By Amanda C. Haury | March 12, 2012 AAA

With health insurance costs on the rise, many consumers are thankful to have any type of health insurance, let alone a policy that will save them money. It is important for consumers to understand how their policy works - only then will they be able to get the most out of their insurance plan. Here is a look at some key features of many health insurance plans and how consumers can stretch their policy to meet their needs.

Deductible
If you have a health insurance policy that has a deductible, take heed. Before your insurance policy will pay for any medical charges, you will be required to pay out of pocket for the amount of your deductible. Some exceptions may be made to this rule such as routine office visits, but typically, your policy will not pay much at all until you have satisfied your deductible. If your company offers multiple insurance plans, opt for the plan with the lowest deductible.

Coinsurance and out of Pocket Maximum
Another expense you will want to pay special attention to is Coinsurance. Once your deductible is met, your plan will pay a percentage of your eligible health expenses. The amount remaining after your insurance company pays is called coinsurance. Coinsurance is your responsibility to pay and it can add up quickly if you are not careful. To protect your wallet, consumers will want to make sure that there is an out-of-pocket maximum clause listed in their policy. The clause puts a cap on how much money the consumer is required to pay each calendar year.

Individual Vs. Group Policies
When it comes to insurance policies, the more the merrier; the more people who are enrolled under a group, the better price you are likely to receive. While individual policies are available, they usually carry a hefty price tag. If at all possible, enroll in a group health insurance plan in order to save a considerable amount of money.

Why Premium Rates Matter
Many consumers will opt for a plan with a low premium only to be stunned by a massive deductible and staggering out-of-pocket costs. When it comes to insurance, the higher your premium is, the less your cost is likely to be throughout the year. A low-priced premium may seem like the best bet at first, but once the medical bills start coming in, you may rethink your decision.

A Smart Investment
If you are faced with a health insurance plan that has a high deductible or coinsurance ratio, it might be a good idea to enroll in a flexible spending account. These plans allow you to put away money on a pre-tax basis to put towards your medical expenses. Rather than paying for your deductible or copay, you can file a claim with your flexible spending account instead.

The Bottom Line
The bottom line is simple. Before you sign on the dotted line, make sure you understand your insurance policy. Factors such as the deductible, coinsurance and copay can drive up your out of pocket costs significantly. Research your policy thoroughly and look for the option that will save you the most money in the long run, rather than simply picking the plan with the cheapest premium. Get the most from your insurance policy by having a full understanding of what your plan offers.

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