Health Insurance: Behind the Deductible


If you are trying to understand your current health insurance better or trying to compare potential new plans, you can find a breakdown, usually in the form of a chart or table, that lists your premiums, deductibles, copays and coinsurance. But what exactly do these terms mean, and how do they affect you? The following information can help you sort them out.

What exactly do these terms mean, and how do they affect you? The following information can help you sort them out. Essentially, your deductible is the amount of money you must pay before the insurance plan begins covering certain costs. This seems straightforward, but it can be very confusing when you try to determine how it relates to the copay, coinsurance and maximum out-of-pocket amounts.

If your deductible is $1,500, for example, your insurance provider will not pay any of your costs until you have paid $1,500 for covered services. Depending upon the specifics of your plan, there are likely exceptions to this rule for which your insurance will cover part of your costs before the deductible has been met. For these services, you may not have to pay anything at all or you may have to pay based on a set copay rate. Each plan has different rules for these circumstances.

“All Marketplace plans cover preventive care,” according to HealthCare.gov. “Screenings, immunizations and other preventive services are covered without requiring you to pay your deductible. Many health insurance plans also cover other benefits like doctor visits and prescription drugs even if you haven’t met your deductible.”

Depending upon your individual plan, you will have set copay amounts for other specified types of services. It is likely that you will have several different copay amounts for different services. You may have one copay amount for sick visits, another for emergency room visits without hospital admittance and yet another for emergency room visits with hospital admittance. Your insurance provider can help you understand exactly which services are covered before you meet your deductible and how much you will have to pay as a copay for each.

If you have health insurance that does not require a copay for annual physical exams, you must still be sure that every service that happens during the exam is covered in the same way. Imagine that during your physical, your doctor decides to do extensive tests to determine the source of a problem you are having. Those tests may or may not be fully covered by your insurance under the collective heading of your yearly physical. It is possible that you may have to pay more than your copay for some or all of the tests. It is important to determine this before you receive the services.

Once you meet your deductible, you will be subject to paying coinsurance, which is a percentage of received services that you cover.

“For example, if the health insurance plan’s allowed amount for an office visit is $100 and you’ve met your deductible, your 20 percent coinsurance payment would be $20,” according to HealthCare.gov. “The health insurance plan pays the rest.”

In order to limit the overall expense of your health care, you will also have a maximum amount that you can be expected to pay out of pocket each year. Typically, this applies only to in-network services, so it is important to make sure prior to each visit that all providers you see are in your network.

For more information about understanding your deductible, be sure to talk to your insurance provider.

 

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