A premium is the recurring payment you make to keep a health insurance policy in force. You pay it whether or not you see a doctor that month, and missing payments can lead to a grace period followed by loss of coverage.
- Premiums are separate from cost-sharing charges like deductibles, copays, and coinsurance.
- On the ACA marketplace, premium tax credits can lower what you actually pay based on income.
- Employer-sponsored plans often split the premium between the employer and the employee.
Premiums are usually the first number people compare between plans, but a low premium doesn't necessarily mean a cheaper plan overall. Plans with lower premiums often have higher deductibles and out-of-pocket maximums, shifting more cost to you if you actually need care during the year.
A common mistake is judging a plan only by its premium. The more complete comparison looks at premium plus expected out-of-pocket costs based on how much care you typically use in a year.