Personal Finance / Unit 8: Insurance and Risk
8.3 Health Insurance
Notes
Health insurance helps pay for medical care. Medical bills can be extremely large.
- Costs include the premium (often shared with an employer), the deductible, copays and coinsurance.
- A network is the group of doctors and hospitals that the plan has agreed rates with. Out-of-network care usually costs more.
- A plan with a low premium often has a high deductible, and the reverse.
- Preventive care, like checkups, is often covered at little or no cost.
- Example: employer plan costs $400 a month; employer pays $300, you pay $100. Your yearly premium cost is $1,200.
Practice
Which plan setup is most common?
There is usually a tradeoff between premium and deductible.
An employer pays $350 of a $500 monthly premium. How much is the employee's share per year?
Employee pays $150 a month, and $150 \times 12 = 1800$.
Why check whether a doctor is in your plan's network?
In-network providers have agreed rates.
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