Q. There are so many parts to Healthcare Insurance Policies. What do they all mean?
A. Healthcare Insurance is a hot topic in the news these days. There are so many options and aspects to each Healthcare Insurance Policy that it is difficult to decipher how to choose the best plan and how to most effectively use that plan once it is purchased. Understanding how an insurance policy works is the first step in knowing how to find the right plan and then how to utilize that plan to get the best care possible at the lowest cost to the policyholder. In this first installment, some of the most common and important aspects of Healthcare Insurance Policies will be discussed:
Insurer – The company who issues Health Insurance Plans.
Insured – The people who are covered by a Health Insurance Plan. It can include the policy holder, their spouse or partner, their children, and sometimes other dependents.
Providers – Doctors, practitioners, dentists, and others who “provide” medical care.
Network – The set of doctors, hospitals, care centers, pharmacies, and other healthcare providers that a Health Insurance Plan contracts with to provide healthcare services at a reduced or “contracted” rate.
Premium – What the actual policy costs the insured. This cost can be split between an employer and employee, can be paid partially or in full by the government, or paid in full by the insured.
Deductible – The amount that the insured will have to pay out of pocket each year, generally a calendar year, before your insurer will begin paying for claims. The higher the policy deductible is, the lower the policy premium will be. Deductibles generally range from $500 to $2,500 per individual and $1,000 to $4,000 per family.
Copay – The set amount that the insured must pay per visit when seeing a physician. There is generally a higher cost for specialists and emergency or urgent care visits. Copays generally range from $5 to $50 per visit.
Coinsurance – The pre-set percentage that a Healthcare Insurance Plan will pay once the insured meets the deductible. Most plans pay 70-80% of the contracted claim amount which leaves the insured responsible for the remaining 20-30%. Premiums for the insured rise as the percentage of coverage by the insurer increases.
Out-of-Pocket Maximum – The yearly limit of what the insured could pay out of their pocket for healthcare claims outside of the cost of the premiums. Once this amount is reached, the insurer pays 100% of the insured’s subsequent claims for that year. Out-of-Pocket Maximums generally range from $4,000 to $10,000 per year.
With so many variables, it is easy to get confused when it comes to Healthcare Insurance Policies. At Columbus Regional Health, our Patient Financial Services Department and Department Managers are always available to answer questions regarding what patients can expect their insurance to pay for various services and what amounts patients might be responsible. We want to be your health and wellness partner for life; helping maximize the value of the patient’s healthcare dollar is a major part of that partnership.
Buddy Hand, MBA, Program Director
Wound Center of Columbus Regional Health
3015 10th Street, Columbus, IN 47201