PREMIUM
Back to GlossaryDefinition
The fixed amount you pay to keep your health plan active, usually each month.
Summary
A premium is like a membership fee for your health insurance - it's the regular payment you make (typically monthly) to maintain your health insurance coverage, regardless of whether you use medical services or not. Think of it as the 'subscription cost' to keep your health plan active and ready to use when you need medical care.
Usage Context
Understanding premiums is crucial when comparing health insurance options, budgeting for healthcare costs, and making decisions about enrollment in health plans during open enrollment periods.
Common Confusions
- Confusing premium with deductible - premium is what you pay to have insurance, deductible is what you pay before insurance kicks in
- Thinking premium is the total cost of healthcare - it's just one component
- Believing higher premiums always mean better coverage
- Assuming premium payments are optional or can be skipped without consequences
