If you use health insurance to help cover your health care costs, chances are you’ll be paying a monthly premium every month. this rate entitles you to the coverage described in your health insurance plan. health insurance, including premiums, can be difficult to understand. Read on for a full review of health insurance premiums and how they work.
what is a health insurance premium?
A health insurance premium is the monthly amount you pay for the health insurance plan you choose. “Your premium is typically billed monthly as a subscription,” explains Josephine Pepa, pharmacist and CEO of Over Your Counter, an online service that aims to provide personalized wellness and self-care guidance and education. Some plans may require quarterly or annual premium payments, adds Linda Chavez, founder and CEO of Seniors Life Insurance Finder.
Unfortunately, earnings in the US. uu. don’t always keep up with the rising costs of premiums and deductibles. in fact, a study by the commonwealth fund found that contributions to premiums and deductibles in employer health plans ate up 11.6% of median household income in 2020, up from 9.1% the decade previous.
how health insurance premiums work
There are a number of factors that affect how much you pay for your health insurance premium. “If your plan allows access to a large network of providers, your monthly premium will be higher than it would be if your plan only allowed access to a handful of doctors and hospitals.” Peppa says. “The cost of your premium also depends on the number of covered dependents, their location, age, the specific category of plan chosen, and tobacco use.”
different types of health insurance premiums
Health insurance plans fall into four main categories, according to the healthcare.gov marketplace: bronze, silver, gold, and platinum. “While bronze plans tend to have lower monthly premiums, your out-of-pocket costs are higher,” says Pepa. “Platinum plans, on the other hand, often come with higher premiums and lower out-of-pocket costs.”
ways to lower your health insurance premium
If you are worried about the cost of your health insurance premium, here are several tips that can help you reduce the cost.
buy as soon as possible
“age is the most important factor in determining your premium,” says chávez. “Insurance companies charge higher premiums to older people. therefore, the sooner you buy health insurance, the lower your premium will be.”
choose the right plan
There are many different types of health insurance plans available. some plans have higher premiums than others. You should choose a plan that has a premium you can afford while still giving you the coverage you need, Chavez says. “If you use your health insurance frequently, paying a higher premium each month will generally save you out-of-pocket costs, but if you rarely use health care, opting for a lower monthly premium with less coverage will likely save you money” says brynna connor, m.d., a health care ambassador at northwestpharmacy.com.
participate in preventive care
Taking advantage of preventive care services, such as blood pressure tests and cancer screenings, can also help lower your premium price, says Todd Ackerman, an independent agent with World Insurance Partners in Burlington, Iowa. By doing so, you can catch problems before they become more serious and costly, potentially driving up your premiums. Fortunately, most health insurance plans cover preventive care.
lead a healthy lifestyle
ackerman also recommends doing your best to practice habits that can keep you healthy and lower your premiums. eat healthy, exercise regularly, and try to get at least eight hours of sleep each night.
The Affordable Care Act allows insurance companies to charge smokers up to 50% more in premiums. If you smoke, Pepa encourages you to quit to save money on your premium (and improve your long-term health).
sign up for a health savings account (hsa)
A health savings account is a personal savings account for health care expenses that you own. the money you deposit is not subject to tax. If possible, Pepa recommends opening an HSA to help cover premium and other health care costs.
sign up for an account at healthcare.gov
even if you already have health insurance, dr. Connor recommends creating a healthcare.gov account and following the instructions to apply for insurance. By doing so, you can learn about the possible insurance subsidies available to you. Since subsidies change, it’s a good idea to reapply each year.
conduct an annual review
to find areas of overlap and lower your premiums, anthony puopolo, m.d., medical director of telemedicine company rex md, recommends reevaluating your prescription drug needs, number of necessary doctor visits, and tax break options each year .
other important considerations for health insurance premiums
When exploring health insurance plans and premiums, Chavez suggests considering the following factors.
Healthy people are less likely to make claims on their insurance policies. For this reason, you are likely to pay a lower premium if you are in good health than someone who is not in good health.
If you lead a risky lifestyle where you smoke or engage in other dangerous activities, your premiums will be more expensive than someone who leads a healthier lifestyle.
Where you live can also affect your health insurance premium. “If you live in an area with a high cost of living, you are likely to pay a higher premium than someone who lives in a less expensive area,” Chavez says.
your family history
If you have a family history of health problems, such as heart disease or cancer, you’ll likely pay a higher premium than someone who doesn’t have a family history of chronic disease.
If you have a job that requires you to travel or work in dangerous conditions, you will likely pay a higher premium than someone with a sedentary job.
“You really need to consider what you need from your health insurance plan, and not plan on being 100% healthy all the time, even if you’re young and have been healthy before,” adds Dr. connor “Illness or injury can happen unexpectedly, so be realistic about what you need and what you can afford.”
- state trends in employer premiums and deductibles, 2010-2020. the Commonwealth Fund. consulted on 05/23/2022.
- premium. health.gov. consulted on 05/23/2022.
- health savings account (hsa). health.gov. consulted on 05/23/2022.
- preventive care . U.S. health department & human services. consulted on 05/23/2022.
- health plan categories: bronze, silver, gold & platinum. health.gov. consulted on 05/23/2022.
- Can I be charged higher premiums in the market if I smoke? kaiser family foundation. accessed 05/23/2022.< /small>