A health insurance premium is an upfront payment that individuals pay to keep their policy in effect. Individual payments depend on their plan. Higher premium plans typically have lower out-of-pocket costs. Individuals often pay premiums through monthly payments or regular payroll deductions.
Individuals can receive health insurance from private insurers, Medicaid or Medicare. Medicare beneficiaries usually receive significantly lower premiums from Medicare than other policies.
What’s the difference between premiums, deductibles, coinsurance and copays?
In addition to premiums, there are other healthcare expenses, such as copays, coinsurance and deductibles.
- Deductibles are the determined amount of money that beneficiaries must spend per year to activate plan benefits.
- Coinsurance is the set percentage of costs that beneficiaries pay after reaching their deductible.
- Copays are the determined amount of money beneficiaries pay for healthcare services.