The total cost of your healthcare plan is one of the biggest concerns people have. If you’ve decided a Preferred Provider Organization (PPO) health plan is the way you want to go, you’ll find there’s a wide range of plan options out there with varying costs. Here’s an outline of the general costs you can expect and an explanation on how those can go up or down depending on the category of plan you choose.
Basic PPO Health Insurance Costs
- Premium – Your premium is the monthly payment you make to your health insurance provider just to keep your health plan active.
- Deductible – Your deductible is the amount of healthcare costs you must pay before your health insurance starts to pay for your care. Your premium and copays or coinsurance don’t count toward this deductible.
- Out-of-pocket maximum – This is the most you will pay out-of-pocket for your health care. Unfortunately, your premiums and copays or coinsurance don’t count toward this maximum.
- Copays or coinsurance – Not every health plan includes copays or coinsurance, but if yours does, you’ll pay these small fees usually when you go to the doctor for wellness visits, when you get a prescription, if you’re admitted to the hospital, or when you get other care. These copays aren’t always included in your deductible or out-of-pocket maximum so if the plan you’re looking at includes these fees, it’s important to add up your total expected costs so you’re not surprised.
How These Costs can Differ
Health insurance plans are broken up into four categories: Bronze, Silver, Gold and Platinum.
- Bronze plans typically have the lowest premiums so the health plans are attractive, but they also have the highest out-of-pocket cost when you receive care and bronze deductibles can be thousands of dollars a year. This is a good choice if you don’t need much care outside of wellness visits (which are usually covered without meeting your deductible) and you’re looking to save money on your monthly premium.
- Silver plans typically have higher premiums than Bronze plans but more of your costs will be covered when you need healthcare. Silver deductibles are also usually lower than Bronze deductibles. Something to note about silver plans, is that you might qualify for cost-sharing benefits from the government. If you do, then you must order a Silver plan and your monthly premium could end up being cheaper than with a Bronze plan.
- Gold plans usually have high monthly premiums and low costs when you receive medical care. Gold plan deductibles are also usually low. If you use a lot of care and you’re willing to pay more each month so that more of your care is covered, then a Gold health plan could be a good choice.
- Platinum plans have the highest monthly premium and the lowest costs when you get care (insurance usually pays about 90% of your costs). Platinum deductibles are also very low. Like Gold plans, Platinum plans are a good choice if you get a lot of care and you can afford to pay high monthly premiums in order for more of that care to be covered.
Finding the right health insurance plan that meets your financial and health goals requires you to understand the basic costs. Now that you have a clear understanding of PPO health plans costs, you can also review plans like HMOs and HDHPs to find the healthcare plan that fits your needs.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.