Navigating the Insurance Maze ~ by Beth Leiner
For many people, trying to navigate the insurance maze can be confusing as well as frustrating. It often seems there are more questions than answers. What’s the difference in a copay and coinsurance? Why do I pay a higher copay at one office than I do at another? Why am I paying more/less today than I did for my last visit? And the list goes on . . .
Health insurance is a product that you purchase or someone purchases on your behalf to cover your medical expenses. Like car insurance covers your car if you get into an accident, health insurance covers you if you are sick or injured., and for preventive care to help keep you well. Different health insurance plans cover different percentages of your costs. Most plans are designed to share the cost of healthcare with you. There are a few ways these costs might be shared and you should familiarize yourself with your plan’s benefits and how these apply.
COPAY – A copay is a fixed amount you pay for a service (i.e. doctors visit, therapy session) with the insurance company paying the remainder of the cost. It is consistent in that you pay the same amount at each visit.
COINSURANCE – Coinsurance is when you share costs by paying a percentage of the charge for the specific service rendered. It varies based on the cost of the service. For example, if you have a 30-minute therapy session billed at $100, your coinsurance amount would be less than a 60-minute session billed at $140.
DEDUCTIBLE - A deductible is the amount you pay for care BEFORE the insurance company starts to pay its share of the medical costs. Once you meet your deductible each benefit year, your insurance company begins to cover some or all of the costs of your care. Some services are covered whether or not the deductible has been met, depending on your plan benefits.
OUT OF POCKET MAXIMUM - This is the maximum amount you'll have to pay each year for covered services. This amount resets each year on your policy renewal. Once your deductible, copay and coinsurance you have paid “out of pocket” adds up to the amount of your out of pocket maximum, the insurance company pays 100% for any covered service for the remainder of the benefit year.
EOB – Every time services are provided (i.e. doctor’s visit, dentist visit, therapy session) a claim will be submitted to your insurance company for payment. Once the claim has been processed, your insurance company then sends out an EOB to your healthcare provider and to you. The EOB (Explanation of Benefits) provides details about how the claim has been processed and explains what portion was paid to your health care provider and what portion, if any, is your responsibility. If you don’t understand why you owe money or are simply having trouble understanding the EOB, call your insurance company.
The most important thing to remember when dealing with insurance, is your insurance benefits are a contractual agreement between you and the insurance provider. You agree to pay a monthly premium in exchange for the insurance company providing you with a service. They work for you. Do not hesitate to contact your insurance carrier when you have questions or if you feel there is an error in how your medical care claims are being handled. The only stupid question is the question not asked!