Health Insurance Articles
Understanding How Much Your Health Insurance Provider Will Pay For Care
2010-04-06
When you want to understand how much a health insurance provider will pay for care, you have a number of factors that you need to consider. Every health care plan is different, so you cannot assume that a medical cost will be covered simply because a previous plan did so. Instead, you'll need to educate yourself on the different ways that you will be expected to contribute to your health insurance coverage so that you understand exactly what your financial responsibilities might be. When you are armed with this knowledge, you are well-prepared to evaluate a health insurance quote and determine exactly what value you are getting for your money.
Health insurance coverage is designed to share the financial costs of health care between the insured and the insurance company. This is usually done by four different methods. First, you will have a deductible that applies to your health insurance. Second, you will have some required co-pays that are due when you receive care. Third, you will have co-insurance payments, or an additional portion of the total health bill that you could be responsible for paying. Finally, you will have annual and lifetime limits that control both what you and your health insurance coverage pay.
The deductible is a set amount of money that you must pay before your health insurance will pay anything. It could be zero or several thousand dollars. Once you have paid your deductible for the plan year, your insurance will begin paying its contracted portion. Co-pay is the flat-rate amount that you are required to pay every time you go to your regular doctor, a specialist, the emergency room, or every time you get a prescription filled. It is not necessarily the total of what you will have to pay, but it is what is due at the time of treatment. Your co-insurance may require that you pay for an additional part of the treatment, and usually varies depending on whether you are seeing an in-network or out-of-network doctor. Usually you will pay somewhere between 10-30% or more of any additional medical costs and your health insurance coverage will pay the remaining portion.
One very important factor in any health insurance quote is the annual out-of-pocket maximum, which is the most that you should have to pay in any plan year up to the plan limits. Finally, be sure that you evaluate any annual or lifetime maximums that the health care plan will pay - if the amount is too low, a major accident or illness that costs more than the maximum could leave you with extensive medical bills and no way to pay for them.
