When seeking to understand your healthcare costs, there are some terms you need to know. These include premium, deductible, copayments, and out-of-pocket payments. In addition to knowing what each of these means, when selecting a plan, you should also be able to estimate the total amount of care you’ll need. This estimate will be a rough one, as no one can know for sure how much health care he or she will need that year.

Terms to Know:

• Premium: this amount is paid to the insurance company every month as the cost of having a policy.
• Deductible: your deductible is how much you must spend for healthcare costs before insurance will pay. This excludes free preventive services.
• Copayments: every time you get a medical service after your deductible is paid, you will pay a copayment. This cost is how much out of the total expense of your care that you must pay out-of-pocket.
• Out-of-pocket payments: these payments are ones you make on your own. There is a maximum amount with the ACA. After you’ve reached the maximum, the insurance company must cover 100% of your costs for covered services.

Estimating Your Yearly Care Amount
This estimate is not a simple one, as no one can predict the future. But to select a plan, you need to make this guess. Think about how much healthcare you are on average, barring any catastrophic events, likely to use. For example, if you’re pretty healthy, don’t require regular prescriptions, and don’t need regular medical services outside of a yearly checkup, you can look at a bronze plan as the best form of coverage. Conversely, if you’re someone who requires a lot of medical care due to a health condition or that of a family member, a plan with a higher premium and more care coverage would be a better choice.

When comparing plans on the website, you will be able to label you and your family’s level of care needs as low, medium, or high. Through this estimation, you can see the impact of your plan on your household budget.