A Network is the facilities, providers, and suppliers your health insurer has contracted with to provide health care services.
- Contact your insurance company to find out which providers are “in-network.” These providers may also be called “preferred-providers” or “participating providers.”
- If a provider is “out-of-network” it might cost you more to see them.
- Networks can change. Check with your provider each time you make an appointment, so you know how much you will have to pay.
A Deductible is the amount you owe for health care services your health insurance or plan covers before your health insurance or plan begins to pay. For example, if your deductible is $1,000, your plan won’t pay anything until you’ve met your $1,000 deductible for covered health care services subject to the deductible. The deductible may not apply to all services.
Co-insurance is your share of the costs of a covered health care service, calculated as a percent (for example, 20%) of the allowed amount for the service. You pay co-insurance plus any deductibles you owe. For example, if the health insurance or plan’s allowed amount for an office visit is $100 and you’ve met your deductible, your co-insurance payment of 20% would be $20. The health insurance or plan pays the rest of the allowed amount.
A Copayment or copay is an amount you may be required to pay as your share of the cost for a medical service or supply, like a doctor's visit, hospital outpatient visit, or prescription drug. A copayment is usually a set amount, rather than a percentage. For example, you might pay $10 or $20 for a doctor's visit, lab work, or prescription. Copayments are usually between $0 and $50 depending on your insurance plan and the type of visit or service.
A Premium is the amount that must be paid for your health insurance or plan. You and/or your employer usually pay it monthly, quarterly, or yearly. It is not included in your deductible, your copayment, or your co-insurance. If you don’t pay your premium, you could lose your coverage.
Out-of-pocket maximum is the most you pay during a policy period (usually one year) before your health insurance or plan starts to pay 100% for covered essential health benefits. This limit includes deductibles, co-insurance, copayments, or similar charges and any other expenditure required of an individual for a qualified medical expense. This limit does not have to include premiums or spending for non-essential health benefits. The maximum out-of-pocket cost limit for any individual Marketplace plan for 2014 can be no more than $6,350 for an individual plan and $12,700 for a family plan.
Explanation of Benefits (or EOB) is a summary of health care charges that your health plan sends you after you see a provider or get a service. It is not a bill. It is a record of the health care you or individuals covered on your policy got and how much your provider is charging your health plan. If you have to pay more for your care, your provider will send you a separate bill.
Excerpt taken from brochure titled FROM COVERAGE TO CARE, A Roadmap to Better Care and a Healthier You Pg. 9-11
(Excerpt taken from brochure titled FROM COVERAGE TO CARE, A Roadmap to Better Care and a Healthier You Pg. 9-11)
Example #1: Deductibles, Coinsurance and Out-of-pocket maximum
Your health plan has a:
- $6,000 deductible
- 20% coinsurance
- Out-of-pocket maximum of $5,000
- You must pay $6,000 toward your medical costs before your plan begins to cover costs.
- After you pay the $6,000 deductible, your plan covers 80% of the costs, and you pay the other 20%.
When the next plan year begins, your deductible and coinsurance reset. You are once again responsible for the $6,000 deductible 20% coinsurance.
Example #2: Coinsurance After You've Met Your Deductible
Let's say you fracture your hand while playing sports and you need an X-ray. If you've already met your annual $6,000 deductible, your coinsurance goes into effect. In this example, that means that your plan now pays for 80% of your benefits while you pay the other 20%. Here's the break down of the costs:
- The X-ray for your hands costs $200.
- Your plan covers 80%, which is $160.
- The amount you pay out-of-pocket cost, or your coinsurance, is $40.
Example #3: Maximum Limits
Your health plan sets a maximum limit for certain tests, procedures and medical services. This means that it will cover up to a certain amount for these services. These limits help lower costs for all members by keeping rates fair and reasonable.
Let's say your doctor charges more for the above hand X-ray.
- Your health plan covers a maximum of $200 for an X-ray.
- Your doctor charges $250.
- You may pay the $50 difference.