Since a lot of us are approaching the age that we drop off of our parents’ health insurance plans, here is a thread in laymen’s terms to help better understand health insurance and what you’ll be paying for each month.

First and foremost:

Having health insurance coverage DOES NOT mean that your health expenses are 100% covered. In fact, most insurance plans don’t cover you 100% off rip. Here’s how it really works...

Every month, you pay what is called a PREMIUM. This is the set amount that the insurance company takes to keep your plan active. Like when apple snatched that subscription fee every month.

Premiums are based on what kind of benefits you want to have with your health insurance. We’ll get into those next...

We’re going to start with the DEDUCTIBLE. This is the amount YOU pay before insurance pays anything. So if you require a lot of medical attention, I’d recommend a low deductible.

But here’s the catch...
Lower deductibles often times mean higher premiums, and this is where people mess up. I’ll tell you why in just a sec...

The next term is the CO-INSURANCE. This amount is reported in %. It’s the % of your health costs that you are responsible for ONCE YOU HAVE MET YOUR DEDUCTIBLE. In all honesty, the lower the percentage, the better for you in the long run. But there’s a catch here too. Hang on...

The last term is the OUT-OF-POCKET MAXIMUM. This is the amount that your insurance requires you to pay, period. It doesn’t matter how much your bill is. If you’ve satisfied this number, your insurance is supposed to cover you at 100%.

Now on to the complicated stuff and where most people (including myself before I started working in healthcare) get tripped up.

The terms listed above are referred to as your benefits. These benefits are based on how much you pay for your monthly premium. Basically, if you want GOODT benefits, you’re going to be paying a hefty premium and vice versa.

Let’s look at an example, shall we?

We might experience a few delays here and there. I’m still working

DISCLAIMER: These numbers are totally pulled out of my ass crack, so you technically folks out there can suck it. This is to help people understand.

Say you have a premium of $5. Pretty low, huh?

But then you have a $10,000 deductible, a $20,000 out of pocket max, and a 75% coins...

This means YOU will be responsible for your own health bills up to $10,000. Once you’ve reached your deductible, you’ll be responsible for 75% of your health costs until you’ve reached $20,000. Only then will you be covered at 100%.