health insurance

Slash Health Insurance Costs in 2025!

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Why does health insurance cost matter?

Health insurance in the US isn’t just a plastic card you show at the doctor. It’s a financial security blanket for your medical needs. And knowing how much it really costs is important.

Whether you’re employed, freelancing, or buying your own plan health insurance has a direct impact on your monthly budget, just like rent, groceries, or electricity bills.

Disclaimer:

This blog is for informational and educational purposes only. It does not constitute financial, investment, or legal advice. Readers are encouraged to consult with a qualified professional for personalized guidance. All views presented are neutral and based on publicly available information.

What does health insurance cost?

When people talk about the cost of health insurance, they don’t just talk about the monthly premium. It includes a variety of things:

  1. Premium
  2. Deductible
  3. Copayment
  4. Coinsurance
  5. Out-of-pocket maximum
  6. Non-covered services
  7. Premium: Monthly Payment

The premium is the amount you pay each month, whether you see a doctor or not.

If your plan is through a company, the company typically pays 70-80% of the premium.

If you buy the plan yourself from a platform like HealthCare.gov, you may have to pay the full price (or get a subsidy based on income).

Example: If your premium is $400/month, you’ll have to pay $4,800 a year just to keep the policy active.

Deductible: Initially, you pay it yourself

The deductible is the amount you have to pay first, only then the insurance company will help with the cost.

Example: If your plan has a deductible of $2,000 and you receive medical services worth $1,500, you will have to pay the full $1,500. Until your expenses reach $2,000, the insurance will not pay anything.

Plans with high deductibles often come with an HSA (Health Savings Account), which helps ease the burden.

Co-payment: Fixed amount per visit

A copay is a fixed amount you pay each time you see a doctor or take medication.

$30 — for a general doctor visit

$50 — for a specialist visit

$10 — for a common generic drug

Note: Copays may apply even after you meet your deductible.

Coinsurance: Percentage share of expenses

Coinsurance is where you pay a percentage of your medical expenses, but it applies after you’ve met your deductible.

Example:
If your coinsurance rate is 20% and the bill is $1,000, then:

You’ll pay $200

The insurance company will pay $800

This is different from a copay because it’s a percentage, not a fixed amount.

Out-of-pocket maximum: Annual limit

The out-of-pocket maximum is the maximum amount you will pay out-of-pocket in a year. Once this limit is crossed, the insurance company covers 100% of the expenses.

Example: If your limit is $6,000 and you have paid this amount in deductible, copay, coinsurance, then the insurance will cover all the expenses further.

Note: Monthly premium does not fall under this limit.

Non-covered services: Paying for your own expenses

Not everything is covered by insurance. Some examples:

  1. Cosmetic surgery
  2. Out-of-network treatments
  3. Experimental treatments
  4. Some mental health services
  5. Always read your plan’s Summary of Benefits and Coverage (SBC).

Why is health insurance getting expensive?

The average family coverage premium will exceed $23,000 in 2023. Reasons for this:

  1. New medical technology – expensive treatments and machines
  2. Chronic diseases – diabetes, heart disease are on the rise
  3. Elderly population – more treatment at older age
  4. Admin costs – paperwork and billing are very expensive in the US
  5. Expensive medicines – prices are higher due to less regulation

How does job-based health insurance work?

Most Americans get insurance through their jobs:

  1. Company pays the majority of premiums
  2. You can choose from a variety of plans (from basic to premium)
  3. You can add family members, at an additional cost
  4. FSA or HSA options are available

Pro tip: Compare plans for you and your spouse—sometimes a single plan for the whole family is cheaper.

How to reduce health insurance costs?

  1. Open an HSA or FSA
    HSA: tax-free savings with a high-deductible plan

FSA: pre-tax savings through a job, must be spent by the end of the year

  1. Compare on the Marketplace
    Compare plans and check subsidies at HealthCare.gov.
  2. Stay within the network
    Out-of-network treatment can be 2 to 4 times more expensive.
  3. Go to Urgent Care, not the emergency room
    Urgent Care is cheaper for minor problems.
  4. Check medical bills
    Errors are common—get a copy of the bill, and negotiate if there is a mistake.

What to do during Open Enrollment?

Open Enrollment is held every year in November-December to:

  1. Change plans
  2. Add or delete family members
  3. Apply for subsidies
  4. Update premium and network information
  5. Don’t auto-renew—plans change every year.

Conclusion: Don’t just go by the premium

Health insurance is not just a monthly payment—it’s a strategy to protect both your health and your finances.

Consider:

  1. Your health needs
  2. Possible medical expenses
  3. How much risk you can take
  4. The plan’s network and flexibility

Also visit our latest blog which is CPI Inflation Report Explained What It Means for You

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