HMO health plans are often the more affordable option for healthcare but costs of these individual plans can vary widely, even within the same HMO provider. 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.
HMO Basic Costs
- Premium. Your premium is the amount you pay each month just for the pleasure of having insurance. It doesn’t count toward your deductible or out-of-pocket maximum and depending on the plan you have, you could still be charged a copay for some or all of your services.
- 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 maximum amount you can pay for your healthcare costs per year. Unfortunately, your premiums and copays or coinsurance don’t count toward this maximum and it resets every January, so you start the year at having paid $0. This is important so you can understand your yearly healthcare costs.
- Copays or coinsurance. Not every health plan includes copays or coinsurance, but if yours does, you might have to pay a small fee when you go to the doctor for wellness visits or pick up a prescription, and sometimes you’ll only be charged a copay if receive specific health services like prenatal care or need a visit to the emergency room. The majority of the time, your health plan won’t count copays toward your deductible or out-of-pocket maximum so it’s important to understand the type of care you need and the total cost of what you’ll end up paying.
How These Costs can Differ
Health insurance plans are broken up into four categories: Bronze, Silver, Gold and Platinum.
- Bronze health 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’re relatively young and healthy and don’t anticipate an expensive health event like having a baby or major surgery.
- 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. However, if you qualify for cost-sharing benefits from the government, a silver plan could end up costing you less than a Bronze plan once you flush out the total cost of your healthcare. To find out if you qualify for cost-sharing benefits, visit gov.
- Gold plans usually have higher monthly premiums than Silver plans and but you’ll be charged less when you actually receive care. You’ll also have a lower annual deductible. If you have a condition that needs managing or if you need to take brand-name medication, and you can afford to pay more in your monthly premium, a Gold plan could be the right choice.
- Platinum health plans have the highest monthly premium and since insurance pays up to 90% of your costs, you’ll end up paying the lowest deductible and have the lowest out-of-pocket maximums with this type of plan. Like Gold plans, Platinum plans are a good choice if you need a lot of medical care and you don’t mind paying a high monthly premium.
If you live in a large health insurance market, it’s important to note that some healthcare providers could offer multiple plans in each of the medal categories. It’s important to read each plan carefully and calculate your total costs so you understand exactly what’s covered and what you’ll have to pay for.
If you need more help with health account decisions, check out our blog. We will make you a healthcare benefits expert in no time, without any extra work or effort on your end.
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.