QUESTION

What is the difference between a premium and a deductible? If I want to save the most money possible, should I just pick a plan with the lowest premium?

Individuals with no coverage | Navigating Health Insurance Marketplace Options Comparing Plans: Benefits and Costs
ANSWER

A premium is the amount you pay for your health insurance every month. A deductible is the amount you pay for covered health care services before your health insurance plan starts to pay. With a $2,000 deductible, for example, you pay the first $2,000 of covered services yourself. After you meet your deductible, you usually pay only a copayment or coinsurance for covered services. Your insurance company pays the rest.

Before enrolling in a plan, you should check its provider network for your preferred doctors or facilities, and check the formulary for your medications. Often, if you receive services from an out-of-network provider, those charges will not be counted towards your deductible.

You should also consider how often you use health care services and how much you would be able to pay out of pocket amidst an expensive unexpected emergency. It is important to find a reasonable balance between an affordable premium and also a deductible that would be manageable to pay out of pocket throughout the year or all at once in the instance of an unexpected medical event. A plan with the lowest premium may not necessarily be the most financially beneficial plan to choose if you have a medical condition that requires prescription drugs or visits with your provider throughout the year.

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