In this video, I explain these terms and clear up common misconceptions surrounding them. By understanding these terms, you will be able to make an informed decision on which plan is best for you and your family.

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Today, we will discuss what a deductible is, what a copayment is and what coinsurance is. Knowing these terms when choosing a plan, as well as when visiting your doctor, will save you a lot of time and money.

First, what is a deductible? A deductible is the amount of money that you must pay for services before your health insurance kicks in. For instance, if you have a $5,500 deductible you will have to pay that whole amount out of pocket before your insurance pays a dime. Due to this, it is often advantageous to find a policy that has a lower deductible. Most people will never meet that high of a deductible, unless there is a medical emergency.

This can make it tricky when choosing insurances, especially through the market place. Most policies with low premiums have high deductibles and vice versa. This can make these policies more desirable because you may only be looking at what you will pay each month as opposed to what you will pay when you actually use your insurance, so make sure you choose a plan that fits within your budget and needs. One important thing to know is that plans through the health insurance marketplace pay in full on preventative services, regardless of if your deductible has been met. It is also important to check if your deductible if plan wide or if it has separate deductibles for things such as prescriptions.

You may see “individual versus family deductible” as a part of your policy’s description. The family deductible is typically higher than the individual deductible. However, this can be beneficial in some cases. For instance, let’s say your spouse has a procedure that costs enough to meet the family deductible. This means that everyone else on your policy has met their deductible too, even without stepping foot in a doctor’s office. If you have several members of your family on one plan, it may be a good idea to look into a policy that offers those benefits.

Second, what is co-insurance? Co-insurance is the percentage of the cost of a covered health service that you pay once you have met your deductible. For example, if you have a 10% coinsurance you will be responsible for 10% of the services rendered and your insurance will pick up the remaining 90%. So you may be thinking, wow, this sounds awesome! And it is, especially if you have a plan with a low deductible and a good co-insurance percentage. But then what if you have a procedure with an astronomically high allowed cost, like a heart attack, for example?

This is where your out-of-pocket maximum comes in. The out-of-pocket max is the the maximum amount you will have to pay toward your insurance for the year. Once you meet that number your insurance covers the rest of your services. This is a good way to protect yourself in cases of catastrophic health events. Therefore, it is important to know what your out-of-pocket maximum is, especially if you are of the population who is at higher risk for these major health events.

Third, what is a copayment? A copayment is a set dollar amount you pay for a covered product or service after your deductible is met. For instance, if your plan has a $40 copayment on a visit with your primary care physician, it will cost you $40 to see your doctor, assuming your deductible has been met. Also, with some plans, the deductible does not apply to certain services. For example, many chiropractic plans just have a set copayment regardless of if your deductible is met. Furthermore, the amount of your copayment can vary per service on your plan like for prescriptions or specialist visits. Like with the deductibles, it is typical that plans with lower monthly premiums will have higher copays.

If you’re still having trouble navigating your health insurance pick up my books Easy Healthcare: Choose Your Health Insurance and Easy Healthcare: Obamacare. These books include everything you need to know about how to choose the plan that best fits your healthcare needs.

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In most cases, the answer is that they haven’t yet met their deductible. Many plans cover doctor’s visits and prescriptions, but only after the patient has paid first. If your plan has a deductible, it means that you will pay out-of-pocket for expenses up to that amount, and then insurance will kick in.

So let’s say, for example, that you have a $250 deductible with your insurance plan. You may have to pay out-of-pocket for doctor’s visits or copays until your total expenses reach $250. To be clear, that doesn’t mean $250 per instance. You may pay $60 for a prescription in January, $30 for another in February, and so on. All of those expenses get totaled—in this example you are up to $90. Once you have paid a total of $250, your insurance will kick in and cover your expenses for the rest of the year.

These costs usually reset at the beginning of the year. Hello, January. Early in the year, you may be paying out-of-pocket, but as the year goes on and you meet your deductible, your insurance may start paying on your behalf.

As you budget for the year, you may want to keep these expenses in mind. In fact, you may want to set aside some extra money each month toward the end of the year to cover your out-of-pocket costs at the beginning of the next year. You may also consider opening a flexible spending account (FSA) or health savings account (HSA) in the future to help cover your out-of-pocket costs.

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For many the answer is no. Sometimes it appears that some items are covered one time and not another. How do you figure out whether the information is correct?

We need to start with how to read the health insurance statement. Most insurance companies send you a form after each of your healthcare visits called an “Explanation of Benefits” form (or “EOB” for short). This form will list all of your healthcare services and what is being paid for each service. The form should include the services for everyone in your family that is covered by the policy.

It is important to review each EOB you receive. It is surprising how often healthcare providers bill the wrong services or bill the correct services to the wrong person. Some organizations have reported that 8 out of 10 hospital bills have errors on them. It pays to check.

Second, you want to compare what is being covered with your insurance plan. You probably have a deductible and co-pays on your policy. When you review the EOB, you should see that your insurance company is paying the proper amount for the services.

This is often why you cannot easily figure out your EOB. For example, if you get services at the start of the year, many items might not be covered because you haven’t yet met your deductible. However, some services, such as preventative care, may be covered without first needing to meet your deductible.

Checking your EOB can often save you thousands of dollars by making sure the insurance company pays the correct amount.

Have you had problems reading your health insurance bills? We’d love to hear from you!

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I hope this post helps you Spin Your Healthcare Your Way!

Check out how more information on how to choose insurance in our new book,Easy Healthcare: Choose Your Health Insurance.

Available for download NOW!

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This is the question I got this week from a 22-year-old woman who just started her first job after college:

We talked about her policy, and, of course, there was a deductible.  Since she hadn’t gotten any healthcare services this year, she had not yet met her deductible.  The medication was “covered” by insurance, but the cost of the medication went toward her deductible.  So, she had to pay for the prescriptions out of her own pocket.

When she chose her health insurance plan, she picked the cheapest policy.  She didn’t realize that one of the reasons why it was cheaper was because it was a “high deductible” insurance plan.  It’s likely that most of her healthcare services this year won’t be paid for by the insurance company because of the high deductible.  For our 22 year old, this might be a wise choice.  She pays less per month and she is unlikely to need many healthcare services since she is young and healthy.

Even if you did not select a “high deductible” plan, many people are frustrated at the start of the year by the fact that a lot of healthcare services are not paid for by insurance due to the deductible.  

What can you do?  First, when you select an insurance plan, know what your deductible is.  If your employer has a Health Savings Account (HSA) which allows you to put pre-tax dollars away to pay for healthcare services, it’s wise to put in at least enough to cover the deductible.

You might also want to consider choosing a lower deductible plan the next time you can change your plan.  You need to consider the increase cost of the insurance vs. the lower deductible.

Planning ahead is the best solution so you do not have surprises like our 22 year old.  At least now, she understands her insurance plan and knows what to expect.

Tell us how you choose your deductible?  We’d love to hear from you!

For more information about your health insurance, see HealthSpin’s Easy Healthcare: Choosing Your Health Insurance.

We hope we’re helping you “Spin Your Healthcare Your Way!

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My friend Sally is super friendly, smart and has a great job.  Sally recently explained to me that she is very annoyed with her doctor’s office.  Why?

She was at her doctor’s office last week and she was trying to figure out whether one of the healthcare services she wanted was going to be “paid for” entirely by insurance.  

She kept asking the doctor’s billing people, “Is that covered?”  Although the billing people said “yes,” she later got a big bill from her doctor.  How could this be?

Healthcare has a lot of specific language that you need to understand.  If you ask the wrong question, you might not get the answer you were looking for.

“Covered” services: are healthcare services that your health insurance “covers” under your health plan.  So you might think, “If it’s covered, I won’t have any out-of-pocket costs.”  Think again!

Most insurance plans have co-pays and deductibles.  If you haven’t met your deductible for the year, you will likely have to pay for the whole service even though it’s a “covered” service.  Until you meet your deductible, you will have to pay for the services yourself.

Likewise, most insurance plans have co-pays for certain services.  For example, the cost of your doctor’s visit may “covered” but you may have to pay between $5-20/visit because that is your co-pay for the service.

Again, if you only ask, “Is this service covered?”  You are not likely to get the answer you are looking for.

Asking the right question can help you get the answer you are looking for.

Let us know what you are annoyed with your doctor about.  Leave us a comment below and let us know what is on your mind.

For more information about your health insurance, see HealthSpin’s Easy Healthcare: Choosing Your Health Insurance.

Helping you “Spin Your Healthcare Your Way!

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I hope this post helps you Spin Your Healthcare Your Way!

Check out how more information on how to choose insurance in our new book, Easy Healthcare: Choose Your Health Insurance.

Available for download NOW!

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As you try to determine which health insurance plan works best for you and your family, you need to decide:

1. How healthy is my family?
2. Do I love my doctor?
3. Would I rather pay less now and possibly more later?

These are the questions I asked my friend, Linda who was trying to decide which insurance plan to pick for her family.  Linda is a very busy mom who is constantly balancing the demands of her job and her family.  She has 2 young children and both she and her husband work.  Linda has high blood pressure and her husband is diabetic.  Linda and her husband struggle to eat healthy and almost never have time to exercise.

To Linda, the health plan choices seemed daunting.  Too many choices, no information.  

So we asked our 3 questions:  

1.  How healthy is my family?

In order to easily understand Linda’s family’s health issues, we started by completing her Medical Life list (which you can get for FREE in our ebook What To Do First when you sign up for myhealthspin.com blog).

Once Linda had all her health information at her fingertips, we knew that all the members of her family had some health issues so insurance coverage was important.

Next, we asked:

2.  Do I love my doctor?

Linda and her husband were often too busy to go to the doctor.  If anyone in the family got sick, they relied on Urgent Care or a local clinic.  Having access to an internist and a pediatrician would make Linda’s life easier since her family could get better care.

Whether you have a doctor you love is important to know because when you pick an insurance plan  – each plan will have a list of doctors that are “in network.”  The cost of the doctor’s visit will be less if you pick one who is in the network of providers for the insurance plan.  Since Linda’s family did not have a regular doctor, she could pick any of the plans available that had a doctor that was located nearby.

Lastly, we looked at Linda’s budget and asked:

3.  Would I rather pay less now or more later?

As we looked at the insurance plans she could choose from, some cost more per month and some cost less.  But of course, the plans that had a lower premium, also covered less.  We decided that the middle plan was the best option.  It cost a little more per month but Linda’s out-of-pocket cost would be less over the year.

By asking these 3 simple questions, Linda picked her health plan and had confidence she made the right choice.

Stay tuned for my easy information about how to choose insurance in our upcoming book, Choose Your Health Insurance.

I hope this post helps you Spin Your Healthcare Your Way!

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