A question that plagues many of us is “what is the cost of health insurance?” With all the plans and options and programs and variations, it’s no wonder people have a hard time figuring out what their health insurance really costs.

The first part of the cost of health insurance you will have to pay is the premium. If you get your health insurance through your job, this will probably be deducted from your paycheck. So if you multiply the amount deducted each time you are paid by the number of times you are paid in a year, you’ll know the total amount you are paying for your health insurance premiums.

Most likely, that is not the full amount. Employers usually pay a portion of their workers’ health insurance premiums. If your employer is anything like the ones I’ve worked for, they made sure we all knew just how much they paid for our health insurance. Add what they pay to what you pay and that will be the total premium. If you’ve never had to pay for your health insurance by yourself, you’ll now understand why people who don’t get it through their jobs sometimes have a hard time paying for it.

Whether you are buying your health insurance yourself or get it through work, there are some ways you can reduce your costs. The way to do this is to look at the other pieces that go into answering the question of what is the cost of health insurance.

These involve deductibles and copayments. The deductible is the amount of money that you will pay for your medical expenses before the insurance company pays one red cent. If your deductible is $500 and your medical bills for the year are $495, the insurance company will pay nothing. If your bills are $1000, then you will pay the first $500, then they pay the rest.

A simple rule is the higher your deductible, the lower your premium.

Co payments are a set fee for a specific service. A few common examples are a charge of $20 for a doctor visit or $10 for a prescription. You pay the copay first. The insurance pays the rest. Again, the higher the copayments, the lower the deductible. These other expenses are part of your health insurance costs.

So what is the cost of health insurance? Hard to say. Insurance costs are different for every state so it’s difficult to compare. Some plans cover only the basics; others cover every health need imaginable. It’s been reported that on average a single person’s yearly premium is about $3000 and a family will pay almost $6500 a year. A person in New York will pay about 2.5 times more for a comparable plan bought by someone in a rural Midwestern state.

Keep in mind the question is not simply what is the cost of health insurance, but what is the cost of not having it. While health insurance can take a bigger piece of your paycheck than you’d like, consider what would happen if you needed major surgery.

A good practice is to keep track of your medical expenses. If you know what kinds of services you are likely to need and how often, you can better determine how big of a deductible you want. You’ll also be able to more confidently know which of the optional coverage you’ll accept or decide to skip. Asking the question what is the cost of health insurance is a good first step in managing this expense.