Deductible
A deductible is the amount of money you must pay for healthcare services out of pocket before your health insurance provider begins to cover them. For example, if your policy has a $3,000 annual deductible, you’ll pay that amount on your own. Then once you’ve paid off your deductible, your provider will cover the rest of your expenses or a fixed percentage of them.
Health insurance policies can range in deductibles, as some plans may offer a comprehensive deductible for all medical services while others may require separate deductibles for specific services like prescription drugs or counseling. Many plans also will cover essential services, like annual checkups or disease management programs, before you’ve met your deductible. For example, many non-high deductible health plans and health savings account plans provide for minor expenses like a $25 doctor’s visit outside of the policyholders deductible.
Healthcare plans with lower deductibles typically offer the most extensive medical coverage. However, these plans also have higher premium costs. Meanwhile, plans with higher deductibles, called high deductible health plans, typically offer lower monthly premium costs and qualify participants for a health savings account.
Co-payment
A co-payment, or co-pay, is the dollar amount you pay as your share of the cost for a medical service or product. Co-payments vary from plan to plan and are typically determined by the kind of service you’re getting and what network providers you use. For example, your co-pay for an emergency room visit could be upwards of $200, while a co-pay for a generic prescription drug could only be $10.
Healthcare plans with lower monthly premiums tend to have higher co-payments and vice versa. However, even low co-payments can add up over time if you’re a frequent healthcare user. If you need to visit your primary care physician often, you’ll want to find a plan with a lower co-pay and deductible, as co-payments do not count toward deductibles in most cases.
Co-insurance
Similar to a co-payment, co-insurance is your share of the cost for a covered medical service or product. However, co-insurance is calculated as the percentage of discounted pre-negotiated in-network fees you pay toward covered healthcare services.
It’s important to note that co-insurance kicks in once you’ve met your annual deductible. For example, if your policy has a 20% co-insurance payment, you will be responsible for $20 of the healthcare cost while your insurance provider will cover the remaining 80%. However, if you have not met your deductible at the time of your service, you will have to pay 100% of the expenses.
Like the terms mentioned above, co-insurance can significantly impact your health insurance premium. As with deductibles, higher co-insurance often means lower premiums, while lower co-insurance means higher premiums. Before committing to a plan, evaluate these varying factors to maximize your healthcare savings.
Premium
A premium is the price you pay your health insurance provider for monthly active medical coverage. No matter what type of health insurance policy you have, all health coverage will require a premium.
Premiums are usually the first upfront cost you come across when shopping for health insurance. However, paying attention to other expenses and how they correlate with your premium is essential. For example, though your plan might have a lower premium, you could also have a higher deductible or co-payment. While shopping for plans, make sure to weigh your options when it comes to expenses. After all, a slightly higher premium could save you money in the long run.
Provider Network
A provider network specifies a certain group of healthcare providers contracted to provide healthcare services for insurance policyholders. Composed of doctors, hospitals, pharmacies, and suppliers, your provider network encompasses all of the medical resources that your insurance carrier covers. However, if you venture out of your network for products or services, chances are you will receive lower co-insurance and higher co-pays, which will depend on what is considered usual, customary, or reasonable, or UCR.
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