It’s that time of year again – time for open enrollment in the health insurance world. Are you confused by all the terms and choices? Gatewell finds all of the options overwhelming, and we’re in the business! So, we’ve compiled this guide to help you sort out some of the key decisions associated with choosing a plan.
Premium: This is the monthly payment that you’ll pay to the insurance company, regardless of services rendered. If your insurance is through your employer, often the premium is deducted from your paycheck. Premiums can range from nearly nothing (in a company plan, since the employer will subsidize) to thousands of dollars (in an individual/family plan). Typically, the higher your premium, the less you’ll pay for the items below.
Deductible: This is the amount you are responsible for before your insurance starts kicking in for health expenses. Some plans have no deductible (or at least no deductible for some or many services), while others can have deductibles in the thousands. If this is the case, you will have to pay that amount out-of-pocket before your insurance plan starts paying for services. Generally speaking, the lower the deductible, the better.
Copays/Coinsurance: This is the amount you are responsible for at each doctor’s visit/for each service. Copays might range from $10 to hundreds, as a percentage of the service (higher for surgeries, hospitalizations, etc.). Typically, plans that have lower copays have higher premiums.
Out-of-Pocket Maximum: This is the amount that you are responsible for in total (not including premiums) before your financial portion is complete. Once you meet your out-of-pocket max (usually a number in the thousands), your insurance will pay 100% of medically necessary services. You might still be responsible for services with out-of-network providers, and you’ll still be responsible for services that aren’t covered by your plan.
Are you someone who rarely seeks out medical care? It might make more sense for you to choose a lower premium plan with a higher deductible or higher copays/coinsurance. If, on the other hand, you have a number of specialist providers already at your service, you might be better off paying more up front (a higher premium) so that your deductible and responsibility per encounter are lower. You might also opt for a plan that has a lower out-of-pocket max if you typically spend a lot on medical expenses and want a lower cap (so that the insurance company will start covering more completely earlier on).
Are there typical medical expenses that you incur (or imagine you’ll incur this year)? You might want to do a side-by-side of plans you’re considering. For instance, if you’re prone to accidents, you might want to consider a plan that doesn’t charge a hefty ER/urgent care copay. Or, if you think that you might need residential psychiatric care, see what the different plans you are considering offer in terms of treatment at this level of care. Keep in mind, it’s likely you’ll also need an authorization from an insurance company to embark on this kind of covered treatment and that often, insurance companies will cut coverage when they see fit.
If this isn’t confusing enough, you might have options of different insurance companies to explore (via an employer) or on your own. Any individual who does not have access to insurance through the workplace can purchase insurance individually (just hop on the insurance company website and see if they have individual plans in your location). You might even qualify for a subsidy (a reduction in monthly premium), based on income, through the Affordable Care Act.
It’s also a good idea, before making an appointment with any healthcare provider, to know what expenses you will incur. Make sure you’re aware of your deductible and copay/cosinsurance going into the appointment. Find out if the provider is in-network or out-of-network on your plan (you can typically do this by performing a doc search on your insurance company website, though you’ll want to call the provider to verify since the listings can be outdated). If the provider is out-of-network and you still want to see him/her, find out what percentage of the visit will be covered. This will just be an estimate, however (and likely a low one). If the insurance company tells you that 50% of your $100 physical therapy appointment will be covered, that won’t necessarily mean that you’ll get a check from your insurance after the appointment (and paying out $100) for $50. It means that the insurance company will reimburse you 50% of the value of the service as they see it, not as it actually is. So, in this example, they might say that a physical therapy appointment is valued at $75 (what they call their “usual and customary”) and, therefore, you’d only receive $37.50 reimbursement (50% of the $75).
If you have questions regarding your insurance coverage and services at Gatewell, please contact us for additional information.