Understanding Deductibles In Health Insurance – Recently on Straight Talk, I wrote a piece designed to help you understand your health insurance. This explains what all the words – reduction, networks, claims, etc. – really mean. I also break down who pays what when the medical bill appears. You can remember the three payment zones – the withdrawal zone, the cash zone and the largest pocket zone.
As soon as we played that piece, I heard this question: “So Mike, how are you going to pay for all of these things?”
Understanding Deductibles In Health Insurance
In an effort to make it easier for people to use and understand their health insurance plans, carriers and employers often include fixed payment amounts for specific services. These fixed amounts, called copayments or copayments for short, are used for common medical services.
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Sometimes, the payment from the first dollar you spend is used as coverage. Sometimes, you have to meet a deductible before you start paying. And sometimes, jobs are listed with $0 copays!
Don’t be afraid, I’m going to show you some basic planning designs and explain all of these things. Remember, for your health plan, you should definitely call the Customer Service number on the back of your insurance card to understand how your specific benefits work and what you can pay for services.
I like visual information So to help us understand how customers pay, here are some benefits of standard plans that the federal government uses on healthcare.gov for 2023. These have coinsurance and copays that work together.
Notice in this grid as you move to the right and select a plan with a higher value, the subscribers get smaller. This grid shows seven types of payment services. But the truth is, the federally mandated, standard ACA health plan you buy on healthcare.gov is actually required to cover up to 16 services with copays! This will be a lot to remember, which is another good reason to keep your insurance card and Customer Service phone number close at hand.
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If there is a gap between your deductible and the out-of-pocket maximum, you may be able to get co-pays for other services. Depending on your plan, this could be a hospital visit, imaging or durable medical equipment. If you have any questions, review your plan’s summary of benefits and coverage (your health insurance provider may provide this) and your benefits statement. You can also call the customer service phone number on your ID card to ask specific questions.
While some payers are just a straight dollar amount, it’s worth noting that some require you to meet your deductible BEFORE you start buying these services at copay prices.
This image shows the three payment areas of health insurance for the healthcare.gov silver plan with payment. Click to view larger.
The image above illustrates the payment areas for the standard health.gov silver health plan with copayments. Three payment zones are still active. But now there are additional payers that the member pays in zone 1 and 2. In zone 1, the member pays any co-pay for 16 services and 100% of other services until they you have to remove them. In Zone 2, the member shares the cost of services that are co-pays 60/40 with the insurer but for some services he only pays the copay.
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Drug Tiering and Copays – If you look at the last four rows of this table (the light colored cells), you can see how prescription drugs are sold in different plans using the copay/tiering model. . Tier 1 drugs are generic drugs and usually have the lowest copays. Tier 2 are brand name drugs that have many competitors. And while it is more expensive, these are usually the cheapest among pharmaceutical products. Tier 3 drugs are generic drugs with few competitors. This means they are more expensive, and you can see that reflected in the subscribers. Tier 4 drugs are specialty drugs, or biologics. These are more difficult to produce and carry very expensive price tags. These drugs are injected in doctor’s offices, which are health services that are usually very expensive.
$0 Copays – The ACA gives a lot of money and authority to an independent agency called the US Preventive Services Task Force (USPSTF) and asks them to review every health care, treatment, testing and counseling session. Their job is to determine which of those will be important to include in your health insurance. The ACA then states that services recommended by the USPSTF will be covered regardless of your deductible status at a $0 copay. This means if you get these services in your plan network, they will be free! So when you get your age- and gender-appropriate exams like PAP smears, mammograms, prostate exams, colonoscopies and the like, they’re covered from the first dollar, with a $0 copay for you, the patient. This $0 coverage applies to more than 50 services covered on your health plan, including birth control pills. The ACA expanded the use of $0 customer payments, and it continues today.
All Copay Plans – The concept of a fixed cost for most common health services has become so popular among people who purchase health insurance that carriers are starting to design plans with copays for almost everything, from PCP visits to prescription drugs to hospital admissions! These plans usually have no deductibles (for in-network services) or co-pays. They just have the max out of pocket with lots of down payments. This is new, and I am very interested to see how the market will react to the simple and clear “all paid” program.
Shared Health Plans – Are there any exceptions to the rule? You bet. About 20 years ago, the federal government came up with a simple solution: If you create a savings account that people can use when they choose a federally regulated plan with a higher rate, they will get a better opinion of their health. Pay attention and be the best user. While it may not work out the way they planned, many people today get high quality health plans (HDHP) from their employers. Do these have customer fees?
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Sort of. You see, the HDHP is required by law to provide the insured with the same USPSTF coverage mentioned above along with 50-ish different health services and treatments at $0 copay (in-network) in their senior years. suitable for gender. In addition to that, HDHPs are not allowed to pay customers for routine services such as doctor or specialist visits. Until…
The IRS has recently decided that insulin for diabetics is necessary to allow a special payment before it can be deducted. So now, employers and insurance carriers that offer HDHPs can have a deductible for insulin only. This is a new translation, and we don’t know yet if carriers will adopt the idea. So far, it is an option for employers and insurance companies.
The truth is, I’m sure I’ve explained more than you want to know about paying with this post! But, health plans have many payment components, and deductibles, co-pays, out-of-pocket max AND co-pays are part of your expenses when you need care. It is important to me that you are satisfied with the opportunities and differences in your health plan. Research shows that most Americans do not understand basic health care terms. Understanding what you’re paying for and why when it comes to your health insurance can help you get the best plan for you. When you sign up for your health insurance plan, you may have considered how much you want to pay each month, which is a factor in determining which health plan fits your needs and budget. And with your plan comes countless health insurance terms used to describe different costs, such as ‘coinsurance’, ‘premium’ and ‘copay’, which are not always easy to understand. Read more about those terms and more here. In this post, we will focus on what to remove for your plan. A deductible is the amount you owe for covered health care services before your health plan starts paying. Throughout the year, you will be billed and paid until your deductible is met. After that, you will be responsible for the connection amount charged up to your pocket limit. Deductibles and out-of-pocket maximums vary based on individual plans. Higher deductible plans have lower monthly rates and vice versa. Regardless of which plan you choose, your deductible will reset each year and insurance will not start paying until the deductible is met again. You can see your plan rates, out-of-pocket minimums and covered health services using Blue Cross Blue Shield of Michigan Mobile. If you are a visual learner, the information below will walk you through how the extractor works. Click to expand.
To learn more about what health insurance is and to understand your health plan, visit bcbsm.com. The next time you visit the doctor or pay your health insurance bill, check your deductible and monthly payments. Doing so can help you budget for better health, screening or current health
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