Understanding Health Insurance

 

There are several terms that are important to understand

Co-Pay

Co-Insurance

Deductible

Maximum out of pocket

DME (durable medical equipment)

Co-Pay

The copay is a dollar value that is paid for a consultation. It will range from $0 to $100. The average copay is usually around $40.

The consultation is considered an exam and opinion from the physician. It is a conversation that is had with your doctor.

Procedures do not usually fall in the coverage under a co-pay.

Co-Insurance

The co-insurance is a portion paid by the patient. Some insurance plans have a co-insurance that applies to everything.

Everything like procedures and doctor visits.

Other plans have a co-insurance only for procedures.

It all depends on the plan you purchase.

I will have examples listed below.

Deductible

The the patient needs to pay out of pocket, before the insurance kicks in.

The insurance will typically start working at a percentage.

Most insurances are set up as 80/20.

This means insurance pays 80% and the patient pays 20%.

This continues till the maximum out of pocket dollar value is reached.

At that point the insurance pays 100%

Monthly Premium

The amount you pay per month for health insurance.

Usually, the more you pay, the lower the copay/coinsurance and deductible.

Procedure

Injection

Surgery

Callous care

Nail care

Orthotics

Casting

Xray/Ultrasound

Examples:

Patient A has a copay of $40 with a $1000 deductible and a 90/10 policy. Max out of pocket $7000

Patient B has a coinsurance plan where all interactions go to the deductible (office visits/procedures) and a $1000 deductible and a 80/20 policy. Max out of pocket $7000

Patient A and B go to the doctor for a consult and no procedures are done. The doctor bills the insurance at a contracted rate of $200

Patient A pays $40 (might go to deductible, goes to max out of pocket)

Patient B pays $200 (goes to deductible and max out of pocket)

Let’s pretend patient B has reached their $1000 deductible, then patient B would pay 20% of $200, or $40.

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