Key Considerations When Choosing a Policy

The deductible is the amount you must pay before the insurance company begins paying. The higher your deductible, the lower your monthly premium – but the more you’ll owe if something goes wrong. Choosing a higher deductible makes sense if you’re generally healthy and want to keep premiums low, provided you have enough cash reserves to cover the deductible if you do need care. It’s also worth asking whether the deductible resets per year or per illness. A per-year deductible is far more consumer-friendly: you satisfy it once and the insurer picks up the rest for the remainder of the year. A per-illness deductible restarts the clock every time you’re treated for something new, which can add up quickly.

Most policies don’t cover 100% of your costs after the deductible – they split the remaining bill with you. A policy that pays 100% will carry a high premium. One that pays only 50% of charges could leave you with a large and unexpected bill. The goal is finding a policy that strikes an acceptable balance between what you pay monthly and what you’d owe in the event of a significant medical need.

The co-insurance cap – sometimes called a stop-loss limit – is the maximum amount you’ll be required to pay in a given year. After you reach that limit, the insurer covers all remaining eligible expenses. Caps typically range from $5,000 to $10,000. Before choosing a policy, decide how much total annual out-of-pocket exposure you’re comfortable assuming, then look for a plan that caps your costs at that level.