When choosing a health insurance plan, it’s easy to focus on the amount of the monthly premium. But your premium is only one part of your total health care costs. Other factors, including out-of-pocket expenses, provider networks, and financial assistance, can affect what you spend throughout the year.
Beyond your monthly premium
Your premium is the amount you pay each month to keep your health insurance coverage active. But when you use your benefits, other costs come into play. These can include:
- Copay: A fixed amount you pay for a covered service, such as $30 for a primary care visit.
- Coinsurance: Your share of the cost of a covered service. For example, if your coinsurance is 20%, your plan pays 80% for the service and you pay 20%.
- Deductible: The amount you may have to pay for covered services before your health plan begins paying for certain benefits.
- Out-of-pocket maximum: The most you’ll pay for covered in-network services during a plan year. Once you reach this amount, your plan pays 100% of covered in-network costs for the rest of the year.
A plan with a lower premium may seem like the most affordable option, but lower-premium plans often have higher out-of-pocket costs when you need care.
Here’s how that can work in practice.
A simple example
Imagine you’re comparing two health plans. One has a lower monthly premium but higher out-of-pocket costs. The other has a higher monthly premium but lower costs when you receive care.
If you rarely visit the doctor and don’t take regular prescription medications, the lower-premium plan may be a good fit. But if you manage a chronic condition, may need surgeries or a hospitalization, take ongoing medications, or expect to receive frequent medical care, paying higher premiums each month could help lower your overall health care costs.
How to choose a plan based on your needs and budget
When comparing plans, consider:
- What services and prescription drugs are covered
- How often you and your family receive care
- Whether the plan has a deductible
- The plan’s out-of-pocket maximum
Thinking about your expected health care needs can help you estimate your total costs for the year, not just your monthly premium.
Consider your provider network
Cost isn’t the only factor to consider when choosing a health plan.
If you have preferred doctors, specialists, hospitals, or health systems, make sure they participate in the plan’s provider network. Some health plans, like HMOs and EPOs, require you to see only in-network providers. Others, like PPOs, allow you to visit any doctor or hospital in or out of the network.
You can check whether your doctor participates in the Independence Blue Cross (IBX) provider network before enrolling. You should also confirm that your prescription medications are covered under the plan.
Financial assistance may lower your costs
Based on factors such as age, household size, and income, some Pennsylvania residents qualify for financial assistance that lowers their cost of coverage.
If you’re eligible, financial assistance may help lower both your monthly premium and the amount you pay when you receive care.
- Premium tax credits help lower your monthly premium.
- Cost-sharing reductions help lower certain out-of-pocket costs when you receive care.
Learn whether you qualify for savings through Pennie®, Pennsylvania’s official health insurance marketplace.
Some individuals and families may also qualify for Medicaid coverage.
Find a plan that fits your needs
IBX offers a variety of health insurance plans for residents of southeastern Pennsylvania, with different premium levels, provider networks, and cost-sharing options.
When comparing plans, remember that the plan with the lowest monthly premium isn’t always the lowest-cost option. Consider your expected health care needs, provider preferences, and available financial assistance before making a decision.
Need help choosing a plan? Visit our website or explore your options through Pennie®.
You can also call 1-888-475-6206 (TTY: 711) for help understanding your options and choosing coverage that fits your needs.
