How to understand your health insurance plan

To understand the difference between different health insurance plans and to know which one is best for you it is best to read through the plans being offered. Here is a concise explanation of basic health insurance concepts to help you navigate your options when shopping for the right health insurance.

Deductible: This is the total amount that you must pay before your insurance starts to cover the cost of medical care that is not covered on a first dollar basis (see first dollar benefits).  If you need medical attention that is not covered on a first dollar basis, you must pay for it yourself until your deductible is reached. Then your insurance begins to pay (but not necessarily for all of it, see coinsurance).

First dollar benefits: First dollar benefits are defined as benefits you receive without paying your health plan deductible. These benefits include outpatient doctor office visits, outpatient prescription drugs and preventive care.

Out-of-Pocket Maximum: This is the most you will have to pay out of pocket for the entire year calendar year. This maximum is reached by satisfying your health plan deductible, coinsurance and any service deductibles you are required to pay in order to reach your out of pocket maximum.

Copay: This is a fixed number that you must pay in order to see a doctor or to purchase an outpatient prescription drug.

Coinsurance: This is the amount your insurance company will pay after you have satisfied your health plan deductible versus what you must pay after the deductible is reached. For example, your insurance company may pay 80% of your bills after you have satisfied your deductible. This means you still must pay 20%, the coinsurance amount. However, all the money you pay for your coinsurance is also counted towards your calendar year out-of-pocket maximum. Once you reach your calendar year out-of-pocket maximum, you will no longer have to pay coinsurance and your insurance company will pay 100% of the rest of your bills for the rest of the calendar year.

Call us today if you have any additional questions about health insurance terminology. The best decision is an informed one.