When you’re shopping for health insurance, it’s easy to focus on the premiums and the price you pay per month for coverage. But, that’s not all you pay. While insurance covers some things, you also have to make co-payments for various procedures and supplies, as well as deductibles. So what do out-of-pocket expenses mean? And how does this affect health insurance costs?
1. What Are the out-of-pocket Expenses?
Out-of-pocket expenses are the costs you have to pay “out of pocket”, though this doesn’t include your health insurance plan premiums. Out-of-pocket expenses include but are not limited to co-payments for visits to specialists, the cost of non-covered prescriptions and the cost of services not covered by your insurance policy.
There are a number of out-of-pocket expenses for people using the public healthcare system. For example, in most cases Medicare doesn’t cover vision care, so your eye exam and glasses are typically an out-of-pocket expense. Ambulance rides are also generally out-of-pocket unless you have ambulance coverage, though many with Medicare choose to pay for this separately. A lot of people on the public health care system buy extras coverage to help pay from the exclusions to the public healthcare system.
Private health insurance may also come with its own out-of-pocket expenses. One example is restricted care. In this case, the insurance may provide a shared room in a private hospital. If you ask for a private room in a private hospital, the cost is considered excessive. And you have to pay the “excess” charge. An excess charge may also be how much you have to pay up-front to stay in the hospital before the insurance covers it, though this is often waived if you were in an accident.
2. How the out-of-pocket Costs Impact Your Health Insurance
The more the insurance policy covers, the more you have to pay in premiums. For example, the lower the deductible you have before the insurance covers you, the higher your monthly premiums. And the more “extras” coverage you have, the greater your premiums. When you compare health insurance, research what is covered and what isn’t. It may be worth paying a little more per month to have better coverage for services that you’d otherwise have to pay for out-of-pocket. However, you might find a better deal when you buy a basic hospitalization policy along with vision and dental insurance.
3. The Impact of Exclusions
Health insurance policies may have exclusions for particular conditions. In these cases, your insurance won’t pay for treatment for that condition in a public or private hospital. Then every cost related to treating the issue is an out-of-pocket expense. For example, a private health plan that doesn’t include maternity care means you’re having the baby in the public ward or paying for it out-of-pocket at a private facility.