Learn Everything You Need to Know About Health Insurance Premium
High-deductible health plans, which often have cheaper premiums, have the advantage of allowing you to pay out-of-pocket expenses through a health savings account. (HSA). Contributions to an HSA are made pre-tax, and withdrawals are also tax-free as long as they are utilized for a qualified medical expense. Individual plans with deductibles greater than $1,400 and family plans with deductibles greater than $2,800 qualify as high-deductible health plans in 2022. For 2023, the deductibles will rise to $1,500 for single coverage and $3,000 for family coverage.
What Does the Term “Premium” Mean in Health Insurance?
A health insurance premium is a payment made to maintain the status of your health insurance coverage. When purchasing in the individual market, premiums are often paid monthly. Employees who get health insurance through their company typically pay their portion of the premium through payroll deductions.
When Do Health Insurance Premiums Become Due?
Premiums for health insurance are often paid monthly. If you buy your own health insurance, you will be responsible for making these payments. If your work provides health insurance, your premiums are usually deducted directly from your paycheck.
Is It Better to Have Lower Health Insurance Premiums?
It all depends. In addition to your premiums, the overall cost of your healthcare plan includes out-of-pocket medical expenses. Plans with high premiums tend to have lower out-of-pocket payments, so if you have a lot of medical bills, a high-premium plan may be cheaper.
In Conclusion
A health insurance premium is a payment made to maintain the status of your health insurance coverage. These payments are usually made on a monthly basis and are a major part of the overall cost of your healthcare plan.
A low-cost plan could save you money. All else being equal, health plans with higher premiums tend to have lower out-of-pocket payments. This means that if you or your covered dependents require very minimal medical treatment, high-deductible health plans with lower monthly premiums may be less expensive overall.
