Health Insurance covers your essential health risks and protects you from unexpected high medical costs.
Insurance terms are often found extremely confusing. By understanding the basic terminologies it may give you a broader understanding of your plan.
Premiums
Premiums are the monthly cost of your insurance, you can either pay monthly, quarterly, or yearly when purchasing an expatriate insurance scheme. In general the higher premiums you pay the more services the insurer covers.
Deductibles
Deductibles are the amount of money you must pay first for your care before the insurance company starts to pay their share of your medical costs. The amount of deductible can vary within plans, the higher the deductibles the fewer premiums you will have to pay.
Example: You choose a plan with 1,000 USD deductible, this means that you must pay the first 1,000 USD for your health care services before your insurance company starts paying their share.
Co-insurance
Co-insurance is the percentage of health services that you pay once you have met your deductibles, if you have any, until you reach your out-of-pocket maximum.
Example: Your plan requires you to pay 20% of your co-insurance, therefore every time you need health services you must pay 20% of your care and the insurer will pay 80% of the remaining costs.
You can choose a plan only with a deductible, or only with co-insurance, or with both deductible and co-insurance.
Out-of-pocket maximum
Out of pocket maximum is the limit on the amount you have to pay on a year plan. Once you have reached this amount, the insurer will then pay 100% of all covered health care costs for the rest of the plan year.
Please note that your insurance plans renew every year therefore at the beginning of your renewal, usually on the 1st of January if your policy is based on a civil calendar, or at the date of the renewal of your policy is based on a date-to-date contract, you must again meet your deductible, co-insurance, and reach your out of pocket maximum for the insurer to pay 100% of your health care services.
When choosing health insurance plans it is very important to consider the premiums, deductibles, and the out of pocket costs. It may be tempting to choose the lowest cost premiums however it may cost you more in the long run and may also prevent some health services in which you wish to receive.
If you are still unsure and need further guidance to choose for an expatriate health insurance scheme, you may consult with AEXPAT broker to receive further recommendations.
