What is a Premium for Health Insurance
Your health is important and this is why it is good to ensure that you have an insurance cover.
With an insurance cover, you do not incur high costs when you seek health care services from different facilities.
There are different terminologies that you get in health care insurance that might confuse you.
One of the terminologies is premium for health insurance.
So, what is a premium for health insurance?
Your premium for health insurance is the amount of money you pay to an insurer, typically every month for a certain health plan.
Throughout the health insurance marketplace, there are tax credits available to reduce monthly premiums you pay. In case you are covered through work, it is your employer who is responsible for paying your premium.
If you pay by yourself, you should ensure that you pay the premium within the given deadline per month.
How premium for health insurance works
Health insurance premium is paid every month to your insurer.
When you make payment of the premium, you are allowed to remain on your policy.
It is also good to note that the premium can be paid on regular intervals which can be monthly, yearly, bi monthly or quarterly.
As long as the premium is paid, you get the opportunity to continue with your health insurance plan. Your insurer will continue covering your share of the covered costs throughout the period covered by the plans policy.
If you are able to pay your premium, you will never be dropped from your coverage unless in case of fraud.
You can also be dropped for misrepresenting yourself during a policy period intentionally.
Premiums and policy periods
Your health insurance is based on a period, mostly a year for major medical coverage.
This starts when you make your premium during the first month.
All your deductibles and out of pocket limits are determined by the period of your policy. Coinsurance will not kick in until you reach your deductible.
On the other hand, your insurance provider will not pay 100 percent until you reach your out of pocket maximum.
How the premium affects out of pocket costs and benefits
Generally, the higher the premium of your plans, the more it offers.
This means that you are supposed to pay less, have reduced deductibles, better coinsurance and reduced out of pocket maximum.
You will also have a robust network and receive better drug coverage.