Health Insurance is confusing. Let us help you understand common health insurance terminology, why these terms are important to understanding your benefits, and how they can help you break down your medical bills!
What is my deductible?
Your health insurance deductible is similar to a deductible you would have for your car insurance. Based on your specific policy, your insurance company will set a deductible amount that you have to pay out-of-pocket before your insurance will pay for many of your services. Deductibles can vary widely, ranging from $450 - $12,000. You’ll meet your deductible by receiving and paying for services out-of-pocket up to your deductible amount.
What is my co-pay?
A co-pay is the set benefit amount that you pay for certain services, usually for physician office visits. Co-pays are often different for Primary Care office visits vs Specialist office visits. Co-pays also vary widely, ranging from $5 - $150 per office visit.
What is my co-insurance?
Co-insurances can be difficult to understand. A co-insurance is similar to a co-pay, except that a co-insurance amount is based on percentage (%) of the fees for services and a co-pay is a set dollar ($) amount. If you have a 20% co-insurance benefit, that means that AFTER you’ve met your deductible, your insurance will start to pay 80% of fees for services leaving the remaining 20% for the patient’s responsibility. Co-insurance benefits range from 10% - 50%. Co-insurance payments do not start until AFTER you’ve met your deductible.
Co-insurance Example 1: You have a $1,000 deductible and 10% co-insurance. You have only met $200 of your deductible, so you have $800 remaining to meet. You receive a service that costs $200. You are responsible for the full $200, which will go towards meeting your remaining deductible. After this service, you will have paid $200, your insurance will have paid $0, and you will have $600 remaining to meet your deductible.
Co-insurance Example 2: You have a $1,000 deductible and 10% co-insurance. You have MET your entire $1,000 deductible. You have no deductible remaining. You receive a service that costs $200. You are responsible for your 10% co-insurance, meaning you would pay $20 for the $200 service. After this service, you will have paid $20 (10%) and your insurance will have paid $180 (90%).
Co-insurance Example 3: You have a $1,000 deductible and 10% co-insurance. You have met $900 of your deductible, so you have $100 remaining to meet. You receive a service that costs $200. You are responsible for the full remaining deductible of $100 and then 10% of the rest of the service cost. After this service, you will have paid $100 (remaining deductible) + $10 (10% co-insurance), your insurance will have paid $90, and you will have met your deductible after the service.
Why does my doctor’s office keep talking about an “EOB?”
An EOB is an Explanation of Benefits provided by your insurance company for your service billed by your doctor’s office. Your insurance company will send an Explanation of Benefits to both you and your provider’s office after they’ve processed your claim. It is the breakdown of the billed amount, allowed amount, contractual write-off, insurance payment, and patient responsibility. It is how your provider’s office knows what to charge you for your service based on their contract with your insurance company.
In sum, INSURANCE IS CONFUSING!!! But that’s ok because the experts at Signe Spine & Rehab are here to help you understand. We will continue providing empowering posts about how to understand your health insurance coverage and benefits! We want you to know what you’re paying for and why.
Stay small, ask questions, and use the resources available to you, and you should start to feel more and more comfortable when talking to medical office and facilities about your bills.