I am sure you have heard the saying “Knowledge is Power.” In order for you to take control of your health insurance coverage and to make sure it is working for you, there are key financial terms that you must know and understand. The five terms below affect the amount of money you may have to pay for your health care after your health insurance plan processes your claims. Insurance companies do make mistakes in calculating these amounts. It is in your best interest to understand how these terms work under your insurance plan:
The amount you owe for health care services your health insurance or plan covers before your health insurance or plan begins to pay. For example, if your deductible is $1000, your plan won’t pay anything until you’ve met your $1000 deductible for covered health care services subject to the deductible. The deductible may not apply to all services.
Your share of the costs of a covered health care service, calculated as a percent (for example, 20%) of the allowed amount for the service. You pay co-insurance plus any deductibles you owe. For example, if the health insurance or plan’s allowed amount for an office visit is $100 and you’ve met your deductible, your co-insurance payment of 20% would be $20. The health insurance or plan pays the rest of the allowed amount.
A fixed amount (for example, $15) you pay for a covered health care service, usually when you receive the service. The amount can vary by the type of covered health care service.
The most you pay during a policy period (usually a year) before your health insurance or plan begins to pay 100% of the allowed amount. This limit never includes your premium, balance-billed charges or health care your health insurance or plan doesn’t cover. Some health insurance or plans don’t count all of your co-payments, deductibles, co-insurance payments, out-of-network payments or other expenses toward this limit.
The facilities, providers and suppliers your health insurer or plan has contracted with to provide health care services. In-network patient responsibility amounts, deductible, co-payment, co-insurance, usually costs you less than out-of-network amounts.