Sometimes, healthcare can seem like a whole different language. In this series, we break down some common healthcare terms into plain English.
Premium (noun) — The amount of money you pay your insurance company, generally on a monthly basis, for the plan you’ve chosen. Your premium is a set amount you pay every month, regardless of whether you use your insurance that month or not.
Simple enough, right? Well, let’s break it down a bit further to really get to the bottom of this.
Your premium is the baseline price you pay in order to access your health insurance. Think of it like a cover charge for getting into a club — it’s the amount you pay to get access to the party, but you usually still need to pay other costs as well. In the club, that might be for food or drinks. In healthcare, those fees are things such as deductibles, copayments, or coinsurance.
If you have insurance through your employer, your monthly premium might be automatically taken out of your paycheck and applied to your insurance, in which case you don’t need to worry about paying a separate deductible bill each month.
So how high should your premium be? While it might seem like you want to pay the lowest premium possible in order to save money, lower premiums often mean higher deductibles. In order to balance out costs, a health insurer will design a plan with lower premiums but higher deductibles or co-payments. This means you save money as long as you’re healthy and not using your insurance, but if you do get sick or need a procedure, your bill might be much higher. These kinds of plans are often tailored for younger people who tend to stay healthier. On the other hand, if you need a lot of health care, a plan with a higher premium and a lower deductible may save you money in the long run.
The main thing to remember is that all your healthcare costs — premiums, deductibles, copayments, etc. — work in relation to each other, so saving the most money for you and your family requires assessing your own needs and picking a plan that works for you and understanding your costs along every step of the way.
When it comes to understanding your costs, SingleCare is here to help.
If you do choose a plan with a lower premium, you can save money by avoiding high deductibles and using SingleCare to shop for healthcare services without any hidden fees or surprises. We’ve negotiated rates in advance, so you can see the cost for a service upfront and pay only for what you need. What’s more — our rates are lower than our competitors. In fact, we save consumers an average of 36% on dental care, and that’s just for one service! Don’t wait to see a doctor because of the high cost. Hop on SingleCare’s website and get the care you need without sacrificing your sanity or wallet.