Are you totally confused by health insurance benefits? You must understand these concepts to effectively evaluate health insurance plans.
- DEDUCTIBLE - The amount you’re responsible for paying each year for covered medical expenses before your health insurance plan begins to pay for them. The insurance company pays for $0 in expenses until your deductible is met within a year. Your monthly premiums do not count towards meeting this deductible amount.
- OUT-OF-POCKET-EXPENSES - Most plans require you to pay some part of the costs, such as a copay when you visit the doctor and/or your deductible and coinsurance. All costs for covered services that you pay for are called “out-of-pocket expenses” because you pay for them out of your own pocket.
- CO-PAYMENT - A fixed amount you pay for a covered health care service. For example, every time you visit an in-network doctor, you pay a fixed amount known as your "copay."
- CO-INSURANCE - Even once your deductible is met, most health insurance plans don’t pay 100% of the cost for absolutely everything related to your health care. Co-Insurance is how costs are shared between you and the health insurance plan. For example, if your plan has 20% Co-Insurance, you pay 20% of costs and your plan pays 80%. The percentage may be different from plan to plan, and may be different for In-Network and Out-of-Network health care providers. Some plans may not have coinsurance.
- OUT-OF-POCKET MAX LIMIT - This is the maximum amount that you, the consumer, will pay out of your own pocket for medical expenses in a year. This does not include your monthly premiums. Once your Out-of-Pocket Expenses has reached this amount in a year, the insurance company pays 100% of covered expenses for the rest of the year. The requirement to have an Out-of-Pocket Max Limit is a new rule for insurance companies. Each plan has a different out-of-pocket max, but the amount is capped by law in 2014 at $6,350 for an individual plan and $12,700 for a family plan.