DEDUCTIBLE: This is what you pay before the insurance company starts paying for covered services.
Types of deductibles For Family Plans Only:
Embedded deductible: Listed on Plan Outline as 500/1000, 2500/$5000 etc. The first number is an individual deductible and the second number is the deductible for a 2nd family member. Most companies cap your family deductible when 2 family members have satisfied their individual deductible.
Family Deductible: Mainly found in high deductible and HSA compatible plans. This is confusing. A plan can be listed as $2500/$5000 and have a family deductible of $5000 which means all claims must equal $5000 before the plan starts paying coinsurance or with a 100% plan before your Maximum out of pocket is met. If you are purchasing an Individual plan as opposed to family coverage, the lower number is always your deductible.
COPAY: This is the cash you pay at the time of service. Your copay may or may not be your total charge for the service. Copays are in addition to your plan deductible and Maximum out of pocket.
Types of Copays
Dr. Copay: Usually $25, $30 or $35 depending on the plan you choose. Once you pay your copay the remainder of your charges for that visit are paid at 100%. Lab work and x-ray done in your doctor office are not included in your copay. They are billed as part of your deductible and or coinsurance.
E/R Copay:Some plans have E/R copays in addition to your deductible and coinsurance.
Prescription Copay: Most prescription cards are copay driven. You have copays for generic, preferred brand and non preferred brand drugs.(Some Plans also have a separate prescription deductible for brand name prescriptions.) If you choose a plan that does not have a doctor copay, you are responsible claim less the negotiated network discount, which is a significant savings. The average bill for a doctor visit doctor without doctor copay is $65.00. (How many times do you go to the doctor in a year?) If you choose a plan without prescription copays: Your prescription discount is based on the cost of the drug and each drug is negotiated as to its cost whether or not it is generic or a brand name drug. Generic drugs have huge discounts. Expensive Brand Name drugs have smaller discounts.
CO-INSURANCE: This is the percentage of your bill you are responsible for after you have met your deductible and before you have reached your Maximum out of Pocket. 80/20 Co-insurance is the most common co-insurance. Some plans offer 70-30 or 60/40 coinsurance to lower your premium. The most important part of coinsurance is the STOP GAP. This is the amount you pay after you meet your deductible and before you reach your maximum out of pocket. You need to know your plan stop gap. It is not equal with all plans. 80/20 to $12,500 is a $2500 stop gap. 80/20 to $15000 has a stop gap of $3000. This is shown on your Outline of Benefits as maximum out of Pocket.
TRUE MAXIMUM OUT OF POCKET: This is the total of your deductible plus coinsurance that you must meet before the company pays 100% of your bills. Your deductible $500 plus coinsurance Maximum Out of Pocket of $2500 equals your TRUE ANNUAL MAXIMUM OUT OF POCKET of $3000.
YOUR TRUE MAXIMUM OUT OF POCKET MAY BE MORE IMPORTANT THAN YOUR DEDUCTIBLE
A $2500 deductible 100% plan (no coinsurance) has a Maximum out of pocket of $2500 dollars. This is the same Out of Pocket as the $500 deductible 80/20 with a stop gap of $2500. Your premium is much lower with the $2500 deductible 100% plan and your Maximum Out of Pocket (exposure) is the same.
If you choose a plan without copays: All charges including doctor visits and prescriptions go toward satisfying your Deductible and Maximum Out of pocket. When you have met your True out of Pocket, all covered charges including doctor visits and prescriptions are paid @ 100% for the rest of the calendar year. Plans with copays: Copays for prescriptions, doctor visits and E/R do not count toward your Deductible or coinsurance and will continue after you meet your True Maximum Out Of Pocket.
HEALTH SAVINGS ACCOUNT: (HSA) This is a tax advantaged savings account that allows you to deposit funds in a tax advantaged account, deduct your deposits from your taxes and pay for medical expenses with pre- tax dollars. You must have an HSA compatible health plan to set up an HSA savings account.
HSA COMPATIBLE HEALTH PLANS: You can purchase a HSA compatible plan and use it as a traditional plan without establishing an HSA savings account.