How your health insurance premium affects your out-of-pocket costs

Your health insurance premiums and out-of-pocket costs are related more closely than you might think.
How your health insurance premium affects your out-of-pocket costs

Out-of-pocket costs refer to the outstanding balance that you are required to pay over what your private health insurance covers after accessing hospital treatment. The costs also include any other service costs that your health insurance premium doesn't.

For individuals who buy their health insurance, coverage for medical care is not preventive in nature as it requires out-of-pocket costs towards their medical bills. For you to be content with your health plans, you need to pick the most suitable with the right health insurance quotes and understand how the out-of-pocket costs operate.


This is charged when you have to visit the doctor or even pick up a prescribed drug from a pharmacy. Your copayment may vary depending on whether you decide to seek assistance in or out of network or on the doctor’s specialty.

Health Insurance Premium

Your health insurance premium refers to the amount of money paid monthly or in quarterly installments that you are charged for the privilege of having an insurance.


Many people assume that once you get the insurance, bills from the health care provider will be completely covered by the insurance. However, this is not the case as deductibles are imposed. This is the amount that is set for you to pay by the insurance company before they start coverage. For instance, if the deductible is set at $1,000 the insurance company will start coverage after you have met the charge.


The insurance company does not pay for all the medical expenses, even after the health insurance premium and deductibles. This means that you have to share the costs of your healthcare services. The insurance coverage plan will have a certain percentage of the medical bills that they will cover while you pay for the rest of the percentage. For instance, if you have to pay 20% of coinsurance in a $100 medical bill, you will have to pay $20 for the bill.

Out-of-pocket maximum

This refers to the most amount you have to pay before the health plan covers for 100% of the health benefits during the policy period annually. This limit includes the coinsurance, deductibles or other similar charges required of an individual for the medical expenses. For instance, the health plan sets the maximum number at $ 5,000.

Any amount paid in coinsurance and deductibles gets credited towards this amount. If within the calendar year the medical expenses exceed the limit, the extras are covered for by the insurance company. This limit is set by the Affordable Care Act (ACA) and does not count insurance premiums, non-network provider’s amounts, copayments, balance billing amounts, spending for non-essential health benefits as well as other out of network cost-sharing.

This limit works to keep your personal expenses in check in case of long-term hospitalization or serious medical diagnosis. Most individuals, however, never reach the limit.

The out-of-pocket costs vary depending on the insurance plan. Metal level health plans, for instance, gold or platinum level health plans require lower amounts of out-of-pocket costs. Such plans, however, comprise of higher monthly insurance premiums.

For individuals who make regular doctor visits and use expensive prescription drugs, metal level plans are highly recommended for affordable health insurance. On the other hand, silver level or bronze level health plans have a lower monthly health insurance premium and require higher out-of-pocket costs. These plans are recommended for individuals who rarely make doctor visits and do not use expensive prescription drugs. Such plans will enable you to find an affordable health insurance with the right health insurance quotes to fit your needs and budget.

To find suitable health insurance quotes, you can use First Quote Health that requires you to fill in your zip code to receive offer quotes on different types of affordable health insurance.

First Quote Health will assist you to compare the health insurance quotes, enabling you sign with a plan that works best for you. This works by looking beyond the monthly insurance premiums to the out-of-pocket costs associated with each plan.

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