Understanding the key terms and details of our health insurance can be confusing.
The deductible is the amount you pay out-of-pocket before your insurance pays. For example, if you have a $1,000 deductible, you pay the first $1,000 of your medical expenses, then your insurance will start to help out. Some policies are designed to allow certain services at a co-pay amount during this deductible phase.
The out of pocket maximum is the most you will have to pay for covered services in a year. Once you reach this amount, your insurance covers 100% of your medical expenses. It is common for a policy that has out of network coverage to have a separate out of pocket maximum for in and out of network services.
A copay is a fixed amount you will pay for certain services, like a doctor’s office visit. For example, you might pay $20 for a check up and your insurance covers the rest.
Coinsurance is a percentage of the cost. You might pay 20% and your insurance company pays 80%. These costs are most often incurred after you meet the deductible and before you meet the out of pocket maximum.
One way to help control the costs when using your health insurance, is to make sure the providers you are using are in your plans network. Some plans will not cover if you use a provider not in their network, and some plans will cover if you go out of network, but it will be more expensive for you to do so. For example, you may pay 40% rather than 20% of the cost.
By: Brenda Langdon
