If you have health insurance, you may not pay much attention to your policy's fee schedules until you experience a medical issue. It’s best to take the time to learn exactly what your insurance will and will not cover before you actually need a medical procedure. Your health insurance coverage has deductibles, but the exact amount depends on the plan. The term “100 percent after deductible” means your insurance company pays all the costs after you have reached your deductible limit.
How Coinsurance Plans Work
Many health insurance policies involve coinsurance, which means you are responsible for a certain percentage of charges after paying your deductible. Many policies are 80/20, which means the insurer pays 80 percent of post-deductible costs and you must pay 20 percent. Because medical costs are so exorbitant, that 20 percent can easily cost you thousands of dollars if you have an emergency or a chronic condition. Some plans may only involve coinsurance if you go out of network for care.
If your deductible is $2,000 and you have 100 percent coinsurance after the deductible, you must pay $2,000 out of pocket annually for eligible health-care costs before your insurance coverage kicks in. Once you’ve reached the $2,000 mark, your insurance will pay the rest of your eligible health-care costs for the year. If you’re hit with a $12,000 health-care bill and didn’t have any other deductibles that year prior to this event, expect your insurer to pay $10,000 of these charges.
Required Copayments
When you visit a health-care provider or fill a prescription, you expect to make a copayment. The amount of a copayment is listed on your insurance card. These payments may or may not count toward your deductible, as this depends upon your insurance plan.
Higher Deductible, Lower Premium
Each month, you or your employer pays for your insurance coverage. If you have employer-provided coverage, you will pay for a portion of it. You can decide to go for a higher deductible to reduce the costs of your monthly premiums. Do the math before making a decision regarding the size of the deductible. If you are basically healthy and have savings, such as those put in your employer-sponsored health savings account, which you can use to pay the higher deductible if necessary, you can save substantially by choosing lower premiums. If you suffer from a condition requiring regular doctor or hospital visits, it may prove wiser to go for a lower deductible and pay higher monthly premiums. Just keep in mind that premiums do not count toward deductibles.
