As healthcare can be very costly across the U.S., many turn to health insurance plans to help offset expenses; making them more affordable and easier to handle. After all, a single visit to a family doctor can cost hundreds of dollars, while a three-day stay at a hospital can rack up to thousands, depending on what is needed.Sponsored Listings
Much like any other insurance plan – whether that be auto, house, or life – an individual pays a premium in order to cover medical costs around a health situation.
There are a plethora of health insurance plans and providers across American, which offer differing healthcare arrangement and rules.
While searching for the best health insurance plan, figuring out is cover in order to pick the best one for you and your family, can be a daunting task. A married couple with no children might have a very different health insurance plan from a couple that is currently expecting, versus a single student, or a family of five.Sponsored Listings
The good news is that, thanks to the Affordable Care Act, the U.S. has introduced a number of standard “essential health benefits” within healthcare insurance plans; before this, benefits varied dramatically.
Standard health insurance benefits include:
- Emergency services
- Lab tests
- Mental health and substance abuse treatment
- Maternity and newborn care
- Pediatric care, including vision and dental
- Outpatient care (doctors and other services one would get outside of a hospital)
- Preventive services (e.g. immunizations), as well as chronic diseases management
- Prescription drugs
- Rehab services
Understanding health insurance coverage costs can be tricky. While a premium payment is needed to enroll in a plan, this might not be the only cost you encounter after healthcare is received. In addition to what you pay within your plan, there can be costs around accessing care, creating out-of-pocket expenses that you weren’t aware of. Generally, the more you pay with your premium costs within your health insurance plan, the less you pay when you access health care.
Below is an overview of plan terms, in relation to costs outside your premium payment to enroll.
- Annual Deductible: This signifies how much you would pay for healthcare costs before your insurance company starts paying for medically expenses. That is, if your annual deductible is $3,000 for the year, you would have to pay $3,000 in health care expenses within the year first, before your insurance company started to cover any costs.
- Out-Of-Pocket Expenses: Sometimes referred to as “cost sharing”, this reflects a part of the medical costs you are responsible for paying when you receive health care. The premium payment is separate from this. Advertisement
- Coinsurance: This is a percentage of medical care costs. That is, if an MRI costs $500, you may have to pay 20 percent of this expense ($100) via your coinsurance agreement, while your health insurance provider pays the leftover 80 percent ($400). Health insurance plans with increased premiums typically have lowered coinsurance rates, and vice versa.
- Copay: This reflects the upfront and fixed amount a person pays every time they receive health care. A copay of $50 may be applicable within a plan when visiting your family doctor, where the insurance provider pays the rest of the bill. Much like coinsurance, health plans with higher premiums tend to have lower copays.
- Annual Out-Of-Pocket Maximum: This term outlines the highest cost-sharing amount clients are responsible for, annually. It totals up copays, your deductible, and coinsurance; however, it’s important to note that this does not include your premium. Regardless, once this limit has been hit, your insurance provider covers all health costs for the rest of the year. Having said that, customers rarely reach this out-of-pocket limit, but it can happen if someone has suffered a serious illness or accident during the year, where frequent healthcare visits are needed. Higher-premium plans tend to have low out-of-pocket limits.
It’s important to note that some health insurance plans are able to keep costs at bay is by contracting specific providers to offer their customers favorable prices. This can include hospitals, physicians, labs, as well as pharmacies.
If a provider is used that is not within the health insurance plan’s network, you insurance company may either pay a smaller portion of the medical expense – or not pay it all; so, it is vital to know and understand your health insurance plan before enrolling and using it.