Understanding Your Insurance
Health insurance plans come in all shapes and sizes, so it’s very important to contact your health insurer to make sure that you understand how your plan works. Many plans have changed significantly in the past few years, so it’s crucial to note that your plan may not work or cover your health needs the way it always has.
Also, insurers negotiate rates with different health care organizations and providers, which could impact the cost of care at those locations (e.g., in-network providers versus out-of-network providers).
Here are a few basic concepts to understand about health insurance plans:
Deductibles
This is the amount you pay for eligible medical services or medications before your insurance plan starts to pay. For example, if you have a $5,000 annual deductible, you are responsible for $5,000 in medical expenses before your insurance plan begins to pay its contracted rate.
Many plans are now considered “high-deductible plans” – which have a lower monthly premium for the consumer, but do make the consumer responsible for a larger share of medical costs when those costs are incurred.
Copays
A copay is the flat fee that you pay for a medical visit or prescription. For example, if you visit your doctor for an unexpected health need (e.g., a sprained ankle) and your co-pay is $500, you will pay $500 for that visit.
Copays are typically printed on your insurance card, so be sure to check there first. Copays may not count toward your plan’s deductible.
Coinsurance
This is the amount you pay for medical services once your plan begins coverage – typically after you have met your deductible. For example, if you have met your deductible and visit the emergency room for a broken leg, your insurance may pay 80 percent of the fees, and you will be responsible for 20 percent.
For most plans, there is an “out-of-pocket maximum” – which is the total amount that you can pay over the course of a year for your medical expenses and prescriptions. Once you have reached that amount, most plans will pay 100 percent of your health costs.
Questions to Ask Your Insurance Provider
- What is my deductible?
- Do I have any copays? If so, for what type of visits and how much are they?
- What is my out-of-pocket maximum?
- Are my current providers “in-network” (e.g., covered by this plan)?
- What are the preferred urgent care and emergency room locations for me and my family?