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What is a premium?

You pay a certain amount each month for your health insurance. This amount is your premium.

How do I pay my premium?

If you receive coverage through your employer, you and your employer each probably pay a portion of the premium for health insurance. Your portion of the premium might be automatically deducted from your paycheck. Your employer pays a monthly bill for covered employees and their dependents.

If you buy your own coverage, your insurance company will send you a bill for your premium.

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Find the right balance between premium and benefits

Your premium is one of the main things to consider when you think about what type of health insurance coverage you need. Other factors might be the providers you prefer to see, services available for your medical needs, drug coverage and other costs such as copayments, deductibles and coinsurance.

You can often get a plan with a lower premium if the other costs associated with the plan, often called the out-of-pocket costs, are higher. For example, you can pay a lower premium if you choose a plan with a higher deductible. Some people would rather pay a higher premium to lower their risk for out-of-pocket costs later. Consider all the costs when you are shopping for health insurance.

Premiums help pay for services

The premium you pay helps cover the cost of services you receive. A portion of your premium also covers the costs for other people in the same pool of coverage as you have. Spreading costs among all members protects everyone on the plan from absorbing too much of the cost of services when highly expensive services are required.

You want your health insurance dollars to be spent on health care services. Security Health Plan uses a small portion of your premium for administrative expenses. New laws require health insurance companies to spend the vast percentage of your premium directly on health care services and activities to improve members’ health care quality.

Even before this law was in place, Security Health Plan was well above the national average on this measure. We spend very little on administrative expenses such as employee salaries, advertising and taxes. As a not-for-profit health plan, our focus has always been to give you the best value for your health insurance premiums, and we have always exceeded the government’s requirements.

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