Learn Everything You Need to Know About Health Insurance Premium
• Health insurance prices can be significantly higher for those who do not have access to an employer-sponsored plan.
• Individuals with low and intermediate incomes who do not have employer coverage have a few choices for lowering their premiums. One option is to see if they are eligible for Medicaid, a federal program managed by states that normally offers lower prices than coverage sold on the individual market. According to the Kaiser Family Foundation, more than two-thirds of beneficiaries are served by managed care plans with which their state has a contract.
Others pay for medical treatment on a per-service basis. Even if you earn too much to qualify for Medicaid, if you shop for plans on a health insurance exchange, you may be eligible for a premium tax credit. The income eligibility criterion limiting premium tax credits to those with family incomes of no more than 400% of the federal poverty level has been suspended beginning in 2021 and continuing through 2025 under the American Rescue Plan Act and the Inflation Reduction Act of 2022.
Premiums for Medicare Health Insurance
Medicare uses payroll tax funding to give a more affordable choice than members of this age group would generally find in the commercial marketplace for seniors 65 and over. The vast majority of Medicare beneficiaries pay no payment for Medicare Part A, which covers hospital charges. There is, however, a monthly cost for Medicare Part B, which covers outpatient medical services and supplies.
The regular Medicare Part B monthly premium for 2023 is $164.90, down from $170.10 in 2022. The annual Plan B deductible for 2023 is $226, down from $233 in 2022.
Depending on your salary and whether you receive Social Security payments, this cost may be more or lower. After you have met your deductible, a 20% coinsurance is applied to your Medicare-approved amount for doctor’s services and other treatments.10 Health Insurance Premium Examples
Assume you’re looking for health insurance on the open market because your employer doesn’t provide it as part of its benefits package. Insurer XYZ has two strategies. The first plan has an $800 monthly premium, a $1,000 yearly deductible, and a 20% coinsurance. The second plan includes a $400 monthly premium but a $5,000 deductible and a 30% coinsurance.
Premiums for the first option will be twice as high. If you have few medical bills during the year, the second plan will most likely save you money.
However, if you end up needing an overnight hospital stay or many trips to the doctor’s office throughout the year, you may wish you had that first plan. When you pay the first $1,000 in approved medical charges, your plan will cover 80% of the remaining costs until your out-of-pocket maximum is reached. However, keep in mind that you would still be responsible for 20% coinsurance.
