The best way to prevent unnecessary out of pocket expenses is to tailor a health insurance policy to meet your needs. Out of pocket expenses can be compared by estimating the number of visits to the doctor and annual health insurance expenses. To find a policy that reduces out of pocket expenses, it's important to understand the different types of health insurance plans and how they can impact out of pocket expenses.

Deductible insurance plans use a flat-rate amount to determine how much policyholders pay for services before the insurance policy kicks in. Plans may have a $500, $1,000 or $5,000 deductible. To receive compensation, the policy holder must pay the full amount of the deductible before services are covered by insurance. In general, the higher the deductible that lower the annual health insurance expenses are. Lower deductibles raise annual premiums and decrease out of pocket expenses. For individuals who visit the doctor occasionally, a higher deductible plan may result in lower health insurance expenses overall.

Co-insurance rates are based on a fixed percentage. With these type health insurance policies, the policyholder and insurance company agree to pay for a percentage of the services rendered. Policyholders are required to pay between 20% and 30% of medical expenses up to a specified amount, which is generally $2,000 to $3,000. After the policy holder meets the co-insurance cap, the insurance company will cover any additional expenses.

Co-pay insurance is one of the most popular and commonly referred to types of insurance. Co-pays are limited to a fixed rate for each service performed. With a co-pay plan, policyholders pay a fixed amount for prescription medications, lab tests, doctor office visits, and emergency medical treatment. Like deductible health insurance, lower out of pocket co-pays result in higher annual premiums. Again, it's important to estimate annual costs based on the medications you take and how many times at year you visit the doctor.

Depending on how often you require medical treatment, paying more for out of pocket can result in lower health insurance expenses. If you use a large number of prescription medications or are frequently visiting the doctor, purchasing supplemental prescription benefit coverage or a separate preventative care benefit may be more cost-effective than paying the out of pocket expenses yourself.

Personal circumstances factor in when estimating annual out of pocket expenses. If you have chronic health problems that require extensive prescription medications and doctor's visits, investing in a policy with a higher premium and lower deductible can reduce out of pocket health insurance expenses in the long run. On the other hand, if you are a healthy individual with a limited medical history, paying more for out of pocket expenses can save money over a high-premium policy.