Avoiding unexpected health insurance costs
Are you someone who just wants the cheapest health care plan? If so, you need to read this before you choose one. Some inexpensive plans can have lots of hidden costs, like specialist copays or family deductibles. We’ve outlined what to watch for when choosing a plan, so that you don’t end up paying any unexpected costs.
Specialist copays
A copayment (or copay) is a flat fee that you pay each time you access care. For many plans, the copay varies depending on what type of doctor you see, and most plans only list the copay for a visit to your primary care provider (PCP).
Copays for specialist visits, lab work, or hospitalizations may be much more, and can add up unexpectedly depending on how you use your insurance. If you only visit the doctor once a year, this might not be an issue, but if you regularly visit specialists, the various copays associated with those visits are definitely something to take note of when choosing your plan.
Out-of-network services
When considering a plan, make sure your primary care physicians and specialists are within your network (in-network). Otherwise, you might be stuck paying more than you expected.
When you go to a doctor outside of your network, you may be subject to something called balance billing. This is when a provider bills you for the difference between the provider’s charge and your insurance plan’s allowed amount.
For example, if the provider’s charge is $100 and the allowed amount according to your plan is $70, the provider may bill you for the remaining $30. Going to a doctor within your network usually prevents this from happening; so don’t forget to check your network.
Family deductibles
Your deductible is the amount of money you have to pay up front for health care services before your health plan begins to pay. For example, if your deductible is $5,000 and you end up at the hospital for a long stay, you’re responsible for the first $5,000 in bills.
Your health care insurance will then pay its share of the remaining costs. Many plans have both individual and family deductibles and it’s important to know the difference so you know when your health insurance starts paying. The individual deductible is counted separately for each individual covered on the plan; once that individual reaches the deductible, the insurance company starts paying for him or her.
A family deductible is the combined, covered medical spending of all family members covered under the plan. Once the family deductible is met, the insurance company starts paying for all family members, whether or not individual deductibles are met.
Many plans with low premiums (what you pay monthly, quarterly, or yearly for your health coverage) have high deductibles, so you need to understand the different types of deductibles associated with your plan and be prepared for these expenses when you choose this type of coverage.
Coinsurance
Coinsurance is something else to look out for when choosing your plan. The basic idea of coinsurance is that you and your health insurance company share the bill, with each of you paying a set percentage of your health care costs. You pay coinsurance plus any deductibles you owe.
For example, let’s say you’ve already met your plan’s deductible of $1,000 and you go to see your doctor, which costs a total of $100. If you’re coinsurance rate is 20 percent, you would pay $20 and your insurer would pay $80. People often confuse copays with coinsurance, but don’t make that mistake.
Copays are a set amount (for example, $30 for a visit with a specialist) that you pay each time you receive service. Coinsurance is a percentage of each claim that you are responsible for paying after you’ve met your plan’s deductible. Many plans include a copay and a coinsurance rate, so it’s important to pay attention to both when signing up for a health care plan.
There are lots of factors to consider when choosing a health plan that’s right for you. Knowing basic terminology and the details of your plan will help you select the plan that’s right for you and keep down those unexpected costs.
Key terms:
Premium: The amount that must be paid for your health insurance policy. You and/or your employer usually pay it monthly, quarterly, or yearly.
Deductible: The sum of money you must pay up front for health care services before your policy’s coverage kicks in (certain preventive services may be covered before you meet your deductible).
Co-pay: A flat fee that you pay each time you access care (ex. You pay $20 when you visit the doctor). This amount can vary by the type of covered health care service.
Coinsurance: Your share of the costs of a covered health care service, calculated as a percent of the allowed amount for the service.
