Understanding Healthcare Insurance – 102

Monica Alderman, Chandler Office

Most insurance policies do not cover all your medical costs, but they do help you pay your medical bills.

Your health insurance plan premium is the cost most people pay on a monthly basis. Your premium is the payment you and your employer make to your health insurance company to keep your coverage active.

A deductible is a set amount you have to pay every plan year for your medical bills before your insurance company starts paying.

Example: Your plan has a $1,000 deductible. That means you pay your medical providers yourself for charges up to $1,000 per plan year. Once you reach or meet the deductible, your healthcare insurance plan starts helping to pay your medical bills.

Let’s see how this might look:

Your annual deductible $1,000

X-ray charges $400 (you pay)

New deductible balance $600

Urgent Care visit $150 (you pay)

New deductible balance $450

Specialist office visit $150 (you pay)

New deductible balance $300

ER visit $300 (you pay)

Your deductible is met $0

Coinsurance refers to money an individual is required to pay for services after paying the deductible amount out of pocket. Coinsurance is often specified as a percentage.

Example: You have an 80/20 plan. An 80/20 plan means your insurance plan pays 80% of your qualifying medical costs after you meet your deductible. You are responsible for paying the remaining 20%.

Let’s see how this might look:

Deductible is met $0

X-ray charges $400
80% – insurance $320
20% – you pay $ 80

Coinsurance is different and separate from any copayment. A copayment or copay is a fixed amount paid each time an insured person accesses a qualifying medical service.

Example: You have a $20 copayment for non-routine doctor visits meaning you must pay $20 each time you see your doctor for an illness or a problem. Copayments are different from coinsurance. A copayment may include all services provided at the visit or services provided in addition to the office visit may apply to the deductible and co-insurance in addition to the copayment.

Insurance companies define Primary Care Physicians (PCPs) as Pediatricians, Family Practitioners, or Internists. All other physicians are considered to be Specialists, including OB/GYNs. However, some insurance policies make an exception and include OB/GYNs in their list of PCPs.

Each medical insurance policy is different, and yours may or may not include each of the features discussed above. Always consult you plan document which can be accessed by mail or online, for these details. Contact your insurance company or your employer’s human resources department if you have further questions.