In health insurance, a premium is a monthly fee a member must pay for a health insurance policy. Health insurance companies generally allow members to pay in different timeframes — if a member opts to pay in one large sum yearly rather than smaller payments every month, the member has an annual premium. A current annual premium is what it sounds like — the current amount a member pays each year for a health insurance policy.
Current annual premiums can result in significant expenses for policyholders — in 2021, the average American paid nearly $8,000 annually for health insurance coverage. However, current annual premiums are not the only cost associated with health insurance coverage. Members also need to consider copays (flat fees associated with certain medical services, such as physical examinations), coinsurance rates (what percentage of the bill a health insurance company covers when insurance is utilized), and deductibles (the amount a patient must pay out of pocket every year before coinsurance rates kick in).