Understanding your health care costs


Definition

All health insurance plans include out-of-pocket costs. These are costs that you have to pay for your care, such as copayments and deductibles. The insurance company pays the rest. You may need to pay some out-of-pocket costs at the time of your visit. Others may be billed to you after your visit.

Out-of-pocket costs allow health plans to share medical costs with you. They can also help guide you to make good decisions about where and when to get care.

When you choose a health plan, you need to understand what your out-of-pocket costs may be. This way, you can plan ahead for what you may need to spend during the year. You also might be able to look for ways to save money on out-of-pocket costs.

Out-of-Pocket Costs

The good news is there is often a limit to how much you may have to pay out-of-pocket. Your plan may have an "out-of-pocket maximum." Once you reach that amount, you will not have to pay any more out-of-pocket costs for the year.

You will still have to pay a monthly insurance premium, no matter what services are used.

All plans are different. Plans may include all or only some of these ways to share costs with you:

Services With Out-of-Pocket Costs

In general, you do not pay anything for preventive services. These include vaccines, annual wellness visits, flu shots, and certain health screening tests.

You may need to pay some form of out-of pocket costs for:

Ways to Save

Choose the right type of health plan based on your location, health, and other preferences. Get to know your benefits, such as how they relate to emergency room visits and network providers.

Choose a primary care provider who helps guide you to only the tests and procedures you need. Also ask about lower-cost facilities and medicines.

Understanding your health care costs can help you save money when managing your care.

References

Healthcare.gov website. Understanding health insurance costs makes for better decisions. www.healthcare.gov/blog/understanding-health-care-costs/. Updated July 28, 2016. Accessed August 8, 2022.

HealthCare.gov website. Understanding your health coverage. www.healthcare.gov/blog/understanding-your-health-coverage. Updated July 25, 2014. Accessed August 8, 2022.

HealthCare.gov website. Your total costs for health care: premium, deductible & out-of-pocket costs. www.healthcare.gov/choose-a-plan/your-total-costs. Accessed August 8, 2022.


Review Date: 8/11/2022
Reviewed By: Linda J. Vorvick, MD, Clinical Professor, Department of Family Medicine, UW Medicine, School of Medicine, University of Washington, Seattle, WA. Also reviewed by David C. Dugdale, MD, Medical Director, Brenda Conaway, Editorial Director, and the A.D.A.M. Editorial team.
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