How does health insurance work?
When you have insurance, you pay a monthly premium to your insurance company. You pay this even if you don’t use medical care that month.
If you need medical care, you will pay a portion of your medical charges and your insurance company will pay the rest. There are a wide variety of plans available that will fit any need and budget. When you contact me, we’ll navigate the waters together to find the right plan for you… whether that’s a marketplace plan that offers subsidized premiums or whether you need the best “Cadillac” health plan you can buy– we’ll find your fit and get you covered!
As we shop, here are some terms you should be familiar with:
- Premium: fixed amount you pay to your insurance plan, usually every month, whether you use your insurance or not.
- Deductible: the amount you must pay out of pocket for care before the insurance company starts to pay its share. Many plans do not require you to meet your deductible before they cover things like preventive care and prescriptions.
- Copayment: a fixed dollar amount you’ll pay for care after you’ve met your deductible. For example, when you visit the doctor, you might pay $25 and your insurance company will pay the rest.
- Coinsurance: works the same as copayment, only instead of a fixed dollar amount, you’ll pay a percentage of the cost of the doctor’s visit. For instance, if your doctor charges $100 for a visit, you would pay the doctor 20% of that (or $20) and your insurance would pay the rest.
- Out-of-pocket maximum: In any given year, this is the maximum amount you could have to pay out of pocket. Once you’ve reached your out of pocket maximum for the year, your insurance will pay 100% of your care past that point for the rest of the year.
- No yearly or lifetime limits: This is fairly new under the Affordable Care Act. After you’ve reached your out-of-pocket maximum, your insurance company must pay for all of your covered medical care with no limit.