Understanding Health Insurance Costs

Your Real Yearly Cost, Not Just the Premium

The formula that compares any two plans

Real annual cost = premiums for the year + what you will actually spend on care under that plan's deductible, copays, and coinsurance. A $250 premium plan can beat a $400 one, or lose to it, entirely depending on how much care you use.

Model three versions of your year

• Light year: checkups and a prescription or two. Low-premium plans usually win.
• Average year: a few visits, urgent care, ongoing medication. The middle tiers often win.
• Heavy year: surgery, pregnancy, or a new diagnosis. The out-of-pocket maximum matters more than any other number.

We run these numbers with you

Bring your actual usage from last year and we will map it across the plans available to you in real dollars. Ten minutes of math prevents a year of regret.

Out-of-Pocket Maximum: "Does This Count?" Checklist

The out-of-pocket maximum is your annual cap, but not every dollar you spend counts toward it. Check each of these against your plan's summary of benefits:

• Deductible payments: Usually count toward the out-of-pocket max.
• Copays: Usually count, though a few plans exclude certain copays. Confirm in your plan documents.
• Coinsurance: Usually counts.
• Monthly premiums: Do not count toward the out-of-pocket max, no matter how much you pay in.
• Out-of-network care: Often does not count toward your in-network out-of-pocket max, and may have a separate, higher (or no) cap.
• Non-covered services: Anything your plan does not cover at all does not count, since you're paying the full cost outside the plan.
• Balance billing from an out-of-network provider: Typically does not count and is not capped by your out-of-pocket max at all.

When comparing plans, always check whether the out-of-pocket max shown includes or excludes out-of-network costs. Two plans with an identical-looking number can leave you exposed very differently.