US Heath insurance

What is a deductible and how does it work?


Typically, a deductible is the amount of money you must pay each year before your health insurance plan starts to pay for covered medical expenses. For example, with a $100,000 heart surgery bill, you would be responsible for paying the first $1,000. After this $1,000 deductible is met, the insurance company will pay a percentage of the bill in what is called the coinsurance.

What is coinsurance?

Coinsurance is a cost-sharing requirement where you are responsible for paying a certain percentage and the insurance company will pay the remaining percentage of the covered medical expenses after your deductible is met. For a health insurance plan with 20% coinsurance, once the deductible is met, the insurance company will pay 80% of the covered expenses while you pay the remaining 20% until your out-of-pocket limit is reached for the year. Typically, the out-of-pocket limit is the maximum amount you will pay out of your own pocket for covered medical expenses in a given year. For a plan with a $2,000 out-of-pocket limit, you will pay a $1,000 deductible and $1,000 coinsurance while the insurance company covers the remaining $98,000 of the heart surgery bill. Even if you are hospitalized again in the same year, the insurance company will pay 100% of your covered expenses within the limit of the lifetime maximum.

What are co-pays?

A co-payment or co-pay is a specific flat fee you pay for each medical service, such as $30 for an office visit, after which the insurance company often pays the remainder of the covered medical charges. Let's say you are not feeling well and went to see your doctor who charges $200 for the office visit. If your insurance plan has an office visit co-payment of $30, then you will only be responsible for the $30 and the insurance company will cover the remaining $170.

Do I have to meet my deductible before I see my doctor?

With some health insurance policies the answer is YES, but today, most health insurance plans do NOT require this. Most companies today offer plans wherein the deductible usually only applies while hospitalized or for more major procedures, such as CT scans or MRIs. Most plans today allow you to visit doctors and specialists, and fill prescriptions, with simply a co-pay.

What is "Out-of-Pocket-Maximum?"

This is the amount of money one would pay out of their own pocket towards their medical expenses in any given year. An out of pocket expense can refer to how much the co-payment, coinsurance, or deductible is. Also, when the term annual out-of-pocket maximum is used, that is referring to how much the insured would have to pay for the whole year out of their pocket, excluding premiums. Usually, your maximum out-of-pocket is never more than a couple of thousand dollars over and above your chosen deductible.

What is a network?

A network is a list of doctors, hospitals and other providers that have contracted, or agreed, with an insurance company to do business with the insurance company. The providers fees have been pre-negotiated, which means that the insurance company will not necessarily pay the doctor or hospital what your actual medical bills are, but will pay a lower amount. For example, when you have a gall bladder removed at a hospital, the hospital's charges, if you did not have health insurance, might be $10,000. But under the network pre-negotiated amount, the hospital may only receive $4,000 as payment in full. This saves you and the insurance company money. If you have a health insurance plan that utilizes a network and you use providers that are not part of the network, the amount of money that you would have to pay for those services will be considerably higher than if you had used providers that were in the network. Your insurance company will probably pay some part of those non-network bills, but you'll be paying a whole lot more. Always stay in your network if possible.

What's the difference between a Primary Care Physician (PCP) and a specialist?

A Primary Care Physician, or PCP, is the doctor you would go to on a regular basis, such as when you're simply not feeling well, or have an ear ache or the flu. A specialist is a doctor that your PCP might refer you to if the problem you have requires a doctor with more experience in a certain area. For example, if you contacted your PCP complaining about chest pains, your PCP would most probably refer you to a heart doctor (a cardiologist) who would have more advanced equipment and training to help you.

What is a pre-existing condition?

A pre-existing condition is any health condition you have or have had prior to applying for a policy. For example, if you currently have had kidney stones at any time during your life, then kidney stones would be considered a pre-existing condition. Some insurance companies want to know about your pre-existing condition going back as far as your date of birth, but most insurance companies only look back ten years.

Will it prevent me from obtaining health insurance?

Sometimes yes, sometimes no. It will depend upon the condition you have or had, its severity, the cost of medications, and whether the insurance company thinks it will lose money by giving you a policy. Some pre-existing conditions will not exclude you from getting a policy; instead, the insurance company may issue a policy to you, but they might try to offer you the policy with a "rider" which is a clause in your policy that says the insurance company will cover you, but NOT give you coverage for your pre-existing condition. Some companies might offer you their policy with a rider that the company says you may ask them to remove after a certain length of time, such as two years, and other companies may make the rider permanent.

What are some common pre-existing conditions that prevent people from obtaining health insurance?

Alcoholism and drug abuse are usually two conditions that most insurance companies will turn you down for. Others include heart attack or other heart problems within the past five years or so, most companies will not take you if you are diabetic. Many companies will not accept you if you've had certain types of cancer EVER in your life, while other insurance companies won't care if the cancer was more than 20 years in the past. It's almost impossible to get health insurance if you are currently obese or pregnant. Having AIDS is always an automatic decline, as is a stroke in your recent past. Most companies won't care if you have controlled hypertension (high blood pressure) or controlled high cholesterol. But if you have BOTH at the same time, there are very few companies that will offer a policy to you.

What is a group/employer plan?


These types of plans are available to you through your place of employment if your employer offers this benefit. Most employers that offer their employees health insurance make you wait until 30 or 60 or 90 days after you've become employed before you can get on the plan. By state law (and some states may vary), benefits are a little different on group plans than they are on individual plans. For example, most individual plans do not include maternity benefits, but almost all group plans do. Mental health benefits are not usually covered very well on individual plans, but on most group plans, mental health benefits are treated like any other illness. Almost all group plans will cover your pre-existing conditions as soon as you become included on the plan, and with no waiting period. This means that if you have a heart condition and get a job that provides you with health insurance benefits, you could have a heart attack the day you become covered and those medical bills will be covered by the group insurance policy. By law, your employer is required to pay at least 50% of your monthly premium. Some employers may pay all of your premium, but they don't have to. Your employer is not required to pay any of your spouse or children's premium — most companies do not pay any of this amount, but some employers will.