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

The term "premium" in health insurance specifically refers to the amount that an insured individual must pay on a regular basis, typically monthly, to maintain their health insurance coverage. It's the cost of purchasing and keeping an active policy, providing access to a range of benefits as specified in the insurance contract.

Understanding that a premium is a recurring cost helps policyholders budget for their healthcare expenses. It does not include additional costs that individuals may encounter, such as deductibles, copayments, or caps on out-of-pocket expenses, which are components of a health insurance plan but serve different functions in managing healthcare costs. Additionally, the concept of premium is distinct from eligibility criteria, which relate more to the necessary qualifications for obtaining insurance rather than ongoing financial obligations for coverage. Thus, the correct identification of "premium" as the monthly payment for health insurance ensures clarity about the financial commitment involved in securing health coverage.