Are ready to purchase some health insurance. With so many options, it can be confusing. Why the health insurance terms alone can leave you dazed and unsure of just what you are purchasing. It would be beneficial to you to familiarize yourself with common terms.
Coinsurance – this is the percentage of the costs that you are required to pay. This is in effect after your deductible is met. So, if the policy has a $2,500 deductible that must be satisfied first. If the policy has a 20% coinsurance then you pay 20% of the total costs. As an example, your total cost was $5,000. You will then pay the $2,500 deductible and 20% of the remain $2,500 or $250. In this example you would then have to pay $2,750 of the $5,000 total cost.
Co-pay – this a flat rate you pay for a service or medications. It could be something like $20 for a doctor’s visit, $40 for a specialist visit. So not matter what the actual cost is you pay the flat rate.
Deductible – this is an annual fee that you pay before your insurance company will pay any benefits. If your plan has a $5,000 deductible, then you will need to pay that first before your health insurance company will cover any costs. Be sure to check the plan as to was services go towards the deductible and those that do not.
In-Network – is a health provider who has an agreement with the insurance company to provide services at an agreed upon rate. You then are able pay less for services when using an in-network provider. Some plans will pay for out of network services, but you pay a higher rate. There are plans that will not pay at all if you go out of network. Be careful and read the plan carefully so you are aware of what is covered and what is not.
Out of pocket costs vs Out of pocket maximum – these are 2 very different things and can be easily confused. Out of pocket costs are things like your co-payments, coinsurance and deductibles. Out of pocket maximum is the set by your insurance company as the most you will have to pay before they will pay 100% of the costs. It includes your co-payments, deductibles, and coinsurance payments towards that amount. Neither out of pocket costs nor out of pocket maximum include services not covered by your plan or your monthly premium.
If you are confused by the health insurance terms of your plan, give us a call and we will be happy to help you understand them. 239-770-1576 or Contact Us.