Health insurance, I know, not the most captivating topic (unless you’re a type A, knowledge-seeking nerd like myself). However, if you can stick with me, I will share with you 3 key factors to better understanding your coverage. If you’re on the fence about sticking around, you should know, The Partnership for Clear Health Communication predicts that those who are less informed about healthcare information experience:
1. 4x times higher health care costs
2. 6% more hospital stays
3. 2 days longer hospital stays
Why knowing the difference between your deductible and out-of-pocket max can save you thousands?
• A deductible is the minimum amount that your insurance company requires you to pay each year. You may see your deductible listed as “ded” on your explanation of benefits (EOB) and other health care forms.
• An out-of-pocket max is the maximum amount that your insurance company requires you to pay each year. You will often see this listed as “oop”.
Many plans require you meet your annual deductible before your insurance begins to pay for services. In return, once you meet your out-of-pocket max, most plans then cover at 100%, if you are staying within the guidelines of your plan (more on that later). Some services, like preventative care visits with your family doctor, may even be covered at 100% without having to meet your deductible first.
Co-insurance vs. Co-pay, which is better coverage?
• A co-insurance is subject to your plan’s deductible. This means, you must pay your deductible first, then your plan begins paying based on your coverage amount. For example, if you have a $1,500 deductible and 20% co-insurance for physical therapy, your plan will cover 80% of the cost of your visits, after your deductible is met.
• A co-pay is not subject to your deductible. Meaning, your plan should begin to pay before your deductible is met. However, since it’s not subject to the deductible, you must continue to pay your co-pay even after your deductible is met. For example. If you have a $1,500 deductible and a $25 co-pay for physical therapy, you would pay $25 per visit, both before and after your deductible is met (at least until you met your out-of-pocket max. We’ll talk about that next).
The golden ticket of insurance; out-of-pocket max.
If your insurance plan has an out-of-pocket max and you have met it before, then you know it is the bittersweet break in the wave of medical debt. Once your out-of-pocket max has been met, your plan should cover at 100% (woohoo!!!), as long as you are within your plan guidelines. Now, let’s talk about those sneaky guidelines. Some things you will want to be sure of, if you have met your out-of-pocket max;
• You are being treated by an in-network provider. Most commercial plans (plans not administered through Medicaid or Medicare) will have in-network and out-of-network coverage. If you have met your in-network out-of-pocket max but see a provider that is considered out-of-network, you could be financially responsible.
• If you have an annual visit limit, pay close attention to that. For example, if your plan indicates that you have 20 visits for chiropractic care, per year, your plan may not pay beyond that limit, even if you have met your out-of-pocket max. Your plan begins counting those visits even before your deductible is met.
If you found this post helpful, stay tuned. Soon, we will breakdown EOB’s (explanation of benefits), prior authorizations and uncover how errors with your claims do happen and why you need to check for them.
