Cost-sharing describes an enrollee’s payment of a portion of medical expenses as opposed to the health plan. Deductibles, copayments, and coinsurance are all forms of cost-sharing.
Cost-sharing is an out-of-pocket expense.
It is important to consider out-of-pocket costs when comparing health insurance plans. Shopping by premium alone can lead to paying more than necessary for healthcare annually for people who use medical care more frequently or are in need of expensive services. By estimating the cost-sharing for the medical services you’ll use in a year and adding that amount to the annual cost of premiums, you will perform a more-informed and useful health plan comparison.
Another important consideration regarding out-of-pocket costs is whether you could pay a large single expense. For example, some bronze level Affordable Care Act health insurance plans have individual deductibles that are nearly $6,000 annually. While it would be less common to pay this amount all at once, it can happen. For example, if you have a major surgery or a serious accident, the resulting medical bills can be quite high and the deductible would need to be paid in full. If paying such a large deductible all at once is unrealistic, you can explore health plans with lower deductible costs. Typically, as deductible costs lower, monthly health insurance premiums increase.