What does the term "premium" refer to in health insurance?

In health insurance, the term "premium" specifically refers to the amount paid for health insurance coverage, which is typically billed on a monthly basis. This payment is essential to maintain an active insurance policy and ensures that the covered individual has access to the health insurance benefits outlined in their plan. The premium is a fixed cost that does not change regardless of the amount of healthcare services used within the coverage period.

In contrast, other related terms refer to different aspects of health insurance. For example, the total amount spent on healthcare services would represent out-of-pocket expenses rather than the premium itself. Copayments are set amounts that a beneficiary pays for specific healthcare services at the time of the visit, which are separate from the monthly premium. Lastly, the deductible is the amount an insured person must pay out-of-pocket for healthcare services before the insurance begins to cover costs. These concepts are important to differentiate from the premium, which is purely the periodic cost to keep the insurance coverage active.