Ever feel like all your healthcare resources are in a different language? Knowing just a few key terms can help you understand your medical plan and how it functions while helping you also decipher your invoices, explanation of benefits (EOBs) and policies. When you take control of your healthcare education, it leads to more productive conversations with your providers, lower out of pocket costs and a healthier you.
Copay – A flat fee that you pay towards the cost of covered medical services. Common services covered by copays included: primary care, specialist, and urgent care visits. It is important to note that High Deductible Health Plans (HDHPs) do not collect copays, you pay the contracted rate on all services until your deductible is satisfied and then coinsurance begins.
Deductible – Before some benefits are available through a plan, you must pay a specific dollar amount out-of-pocket. Under some plans, the deductible is waived for certain services such as preventive care. If your plan’s deductible is $2,000. That means for most services, you will pay 100% of your medical and pharmacy bills until you have paid $2,000 toward the plan. Some medical plans have a separate deductible for pharmacy benefits the must also be satisfied.
Coinsurance – The amount or percentage that you pay for certain covered services under your plan. This is typically the amount paid after a deductible is met and can vary based on the plan design. For example, if your plan’s coinsurance is 20% and you have not yet reached your out-of-pocket maximum, you would pay $200 of a $1,000 bill and the insurance company would pay $800.
Out-of-Pocket Maximum – This is the most you could pay during a calendar year for your share of covered services. Due to recent legislative changes, all copays and deductibles will count toward your out-of-pocket maximum. Once you have paid your out-of-pocket maximum, all healthcare services will be covered at 100%.
Becoming an educated healthcare consumer is a lifelong journey. Just like any skill worth mastering, becoming a better consumer of healthcare is well worth the effort. Taking the first small step has already put you in the driver’s seat of your personal healthcare story. This is just the beginning!
