Last week we reviewed 5 health insurance terms everyone should know. The terms were related to your potential payment responsibility for your medical care after your health insurer has processed the claim. This week we are going to put those terms into action.
Our patient, Jane, starts her plan year on January 1 like most individuals. She has a $1,500 deductible, 20% coinsurance, and $5,000 out-of-pocket limit. On this date, the amount she has paid towards her deductible starts at $0 so for most medical services she receives at this time, her health plan will not pay any of the costs:
Office Visit Costs – $125
Health Plan Pays – $0
Jane Pays – $125
Deductible is Reduced – $1,500 – $125 = $1,375
It is mid-year and Jane has seen several physicians. She has met her $1,500 deductible.Her plan now pays a part of her medical services.
Office Visit Costs – $75
Health Plan Pays 80%- $60
Jane Pays 20% – $15
Jane has continued to receive medical services throughout the year and she has paid a total of $5000 towards her deductible, coinsurance and copayment amounts.
Office Visit Costs – $200
Health Plan Pays 100% – $200
Jane Pays 0% – $0
Throughout the year, Jane’s responsibility for payment got less and less as she received medical services. Unfortunately, as she has met her out-of-pocket maximum, we are approaching January 1 when everything is set back to $0. Jane’s financial responsibility will be back to the $1500 deductible and $5000 out-of-pocket maximum.