Insurance terms
DEDUCTIBLE
CO-INSURANCE
DEDUCTIBLE
The amount of money you pay out of pocket each year before your insurance will begin covering expenses. Deductibles usually start over at the beginning of each calendar year. The deductible may not apply to all services
Example: If you have a $2,000 deductible, you pay the first $2,000 of your own medical expenses. This is called meeting your deductible. After that, your insurance will pay some of your medical expenses. You may still have to pay a portion of your expenses through copays and coinsurance.
CO-PAY
CO-INSURANCE
DEDUCTIBLE
A fixed amount you need to pay for certain medical services, usually at the time of service. Office visits and prescription medicines often require copays.
Example: A visit to the family doctor may require a $25 copay, while an emergency room visit may involve a larger copay. Some services require both a copay and coinsurance.
CO-INSURANCE
CO-INSURANCE
OUT-OF-POCKET MAXIMUM
Co-insurance begins after you've met your deductible and your plan starts paying some of the cost, it is the amount you pay after your insurance has paid its portion of the bill. Co-insurance is calculated as a percentage of total cost rather than a fixed dollar amount.
Example: You've reached your deductible for the year and the cost of your next doctor's visit is $100. If your co-insurance is 20%, that means you will be responsible for $20 and your insurance plan will pay the remaining $80.
OUT-OF-POCKET MAXIMUM
IN-NETWORK VS. OUT-OF-NETWORK
OUT-OF-POCKET MAXIMUM
The maximum amount of money you can pay for medical services over a certain period of time, usually per year. Once you meet your out-of-pocket maximum, your insurance plan will pay 100% of all allowed charges.
Example: Your insurance plan includes an out-of-pocket maximum of $4,000. You have met your $2,000 deductible and paid an additional $2,000 in copays and coinsurance. Your insurance will now pay 100% of any future necessary and allowed medical charges until your policy renews the following year.
ALLOWABLE VS. BILLED CHARGES
IN-NETWORK VS. OUT-OF-NETWORK
IN-NETWORK VS. OUT-OF-NETWORK
The allowable charge is the price that your insurance company will pay for a particular medical service. The allowable amount then also determines how much you pay in coinsurance. You pay a portion of the total allowed amount in the form of a copayment, coinsurance, or deductible. Your health insurer pays what's left. The billed charge is usually higher than the allowable charge. Whether the provider is in-network or out-of-network with the insurance company determines who is responsible for the difference between the allowable and the billed amounts. An out-of-network provider can charge you that balance and it can be a significant amount.
IN-NETWORK VS. OUT-OF-NETWORK
IN-NETWORK VS. OUT-OF-NETWORK
IN-NETWORK VS. OUT-OF-NETWORK
In-network providers are clinics and physicians that have agreed to charge your insurance company discounted rates for medical services. They are also called "preferred providers". Because of these negotiated rates typically you will pay less by going to an in-network provider plus, unlike out-of-network, you cannot be asked to make up the difference between the allowed amount and the amount the provider chooses to bill.
How you and your insurer share costs: (example) Eva's insurance plan has a $2,000 deductible. The Co-insurance is 20% with an Out-of-Pocket Limit of $
