Patient's Guide to Health Insurance!

Health insurance; just talking about it can increase anyone’s anxiety.

What does it cover?

What does it cost?

What do I owe?

These are just some of the questions people ask and worry about. In today’s world, I think we have enough on our plate without concerns on how to pay for it.

So lets take a simplified look at what health insurance really is.

PREMIUMS

The first item that most people look at is what is this coverage going to cost me every month to have it. This is a great question. The idea of health insurance is to get enough people paying premiums so that the actual cost of services is spread over the most number of people to lower the individual cost to get help.

Factors that will affect your premium are your age, sex, ethnicity, pre-existing conditions, copays, deductibles, and co-insurance (COINS). The factors of age, sex, and ethnicity we have no control over. The insurance companies have teams that work the data to determine which age group, whether you were born male or female, and the genetic factors of you ethnicity to determine which groups are at a higher risk of needing services. Less risk, lower premiums. Higher risk, higher premiums.

Pre-existing conditions are any adverse health condition you have prior to you obtaining insurance. This can be like diabetes, cycle-cell anemia, cancer, blood disorders, Crohn’s, and many other conditions or disorder you may have had whether in remission or not. Typically a plan will not prevent you from receiving it with a pre-existing condition, but it will often increase the cost of insurance and then increase the premiums.

Copay, deductible, and COINS are the factors that will determine how much you will pay “out of pocket”

COPAY

A copay is the amount of money you will pay the provider at the time of service. This is determined by the insurance carrier and will depend on the type of plan you have. The higher the copay, the lower the premium.

DEDUCTIBLE

This is the amount of money you will have to pay the provider until your insurance covers all fees. This amount can vary from anywhere from $0 to $16,000. Typically, the higher the deductible, the lower the premium.

COINS

Co-insurance is a bit tricky. This is the amount of the deductible you are responsible for a service and is usually a percentage. This can be as low as 0% or as high as 100%. Again, the higher the COINS, the lower the premium.

All insurances have a copay, deductible, COINS, and premium.

As an example. You have a policy so you pay a flat rate per month called the premium. Your policy may also have copay and/or a COINS with a deductible.

You will pay a predetermined amount per month in premium, this will not change.

You visit your doctor and pay a copay at the time of service. The office will submit the claim, on your behalf, to your insurance company. The insurance company will reduce the amount billed to what they believe is a fair amount. You will receive a bill for the amount not paid by the insurance company, less the copay, the remaining being your deductible or COINS.

I know, you are thinking, WHAT!! This makes no sense. Keep in mind that the cost of services is spread out over the total number of people enrolled in that insurance; so you are helping pay for someone else’s procedure.

If you have major surgery or a major accident, the insurance will adjust the bills submitted under this claim. Then they will apply their discounts and apply your copay. From this point the amount due will be applied to your deductible or COINS. So if the bill is small, say less than $1,000, you may end up owing this entire amount. In the event of major surgery or accident, where expenses can exceed $95,000, you will pay a determined amount out of pocket, but the insurance will pay the remaining balance.

YOUR RESPONSIBILITY

So many people believe it is the doctor office's responsibility to understand their individual insurance plan. There are literally dozens of insurance companies with hundreds of plans. Each plan designed around their customer's needs. Even after the office staff check your eligibility with your insurance carrier, they will receive a disclaimer stating that, "Verification of insurance does not guarantee payment. Each claim will be reviewed and paid in accordance with the individuals plan." This is why it is very important to understand the plan you have and what it does, and doesn't, cover. This will help you avoid financial surprises after seeking healthcare.

Here is a short video to help explain how premiums and deductibles work:

How insurance premiums and deductibles work - Bing video