Rising healthcare costs and the desire to maintain profits is driving insurers and employers to shift more and more of the burden to policyholders through higher premiums, deductibles and coinsurance. This makes it a real challenge to figure out in advance how much you are going to wind up paying if you do get sick.
How much do I need to pay ?
Insurers will say
Your premium + your deductible + any coinsurance you must pay (up to your out-of-pocket maximum) + any copayments = the most you will pay for healthcare each year (for covered services).
Do you understand ?
This description is typical of how insurance companies explain things. They hedge their statement with the words "covered services." The words covered services can trip people up.
The more restrictive your plan the more you will run into some services your plan considers unnecessary and therefore not a covered service.
Read a more about Benefits - What is covered ?
We all know that to have health insurance we need to pay for it. That is the premium we pay every month.
The premium is a fixed, certain monthly expense that we have to budget for when we decide to buy a policy.
What if I get really sick ?
Office visits, testing, prescriptions, specialists and at the worst hospital charges.
Most plans allow you to visit doctors and pay only a copay. It is when you start having tests outside of the doctor’s office that you start to incur some big expenses.
♦ The insurance industry is very inventive when it comes to finding ways to shift more and more healthcare costs to the patient. The industry has coined the term Cost Sharing to refer to what they want the patient (you) to pay.
Check your plan’s description of benefits …Understand what your responsibility would be for copay and coinsurance. Depending upon the type of testing you might have a copay or you might have to pay a coinsurance which could be 20 or 30 percent.
♦ If you have a more modest plan you might have to pay all costs until your reach your deductible. Unfortunately, the trend is toward these types of plans.
Read about plan types to get a better understanding of the differences between various plans.
♦ You may fall into the situation of having to meet your deductible first. If that is the case, your plan will not pay until after you have paid the equivalent of your deductible.
Many Consumer-Driven Health Plans are setup this way.
Once your reach your deductible your plan will then start to pay.
• If the deductible is very high the financial burden can be overwhelming.
After the deductible, you can expect to pay a coinsurance. This is a percentage of approved costs until you reach a maximum amount.
• The maximum amount is called out-of-pocket maximum. After the maximum is reached the plan will have to pay all.
When considering a new plan you want to be sure to compare this number.
There are many different plans with many different deductibles. A general rule is that the lower the deductible the higher the monthly premium.
Due to the high cost of health insurance more people are being pushed into high deductible plans.
• The maximum out-of-pocket limit for a Marketplace plan in 2018 is $7,350 for an individual plan and $14,700 for a family plan.
Keep in mind that plans run on a yearly basis.
♦ When the new year starts the plan resets and your responsibility starts all over.
There is an exception that some (not all) plans have. The exception is called a deductible carryover.
Plans with this carryover provision should state this in the plan’s description of benefits. If you cannot find this information, then you need to ask.
Deductible carryover is a nice benefit.
♦ Should you get sick in the latter part of the year and not satisfy your deductible until late in the year a plan with a carryover feature will carry to the next year some or all of the deductible that you met.
Usually this is limited to the last three months of the year.