What health insurance should I get? This is a question we get asked often. Many times, it is up to your employer who will give you a choice between two plans. It is your job to pick the best one for your situation in that year. The problem is that we can not predict many times what we will have to spend out-of-pocket for medical services. We are here to help you work through the decision process and talk you through some of the basics that you will need to know.
You should think about 3 things when choosing your plan.
1. How much are your premiums, deductibles, and other costs? How much did you pay for services like hospital stays or doctor visits in the past year? Is there a yearly limit on what you could pay out-of-pocket for medical services?
2. How well do the new options cover the services you need this year or the medications you use?
3. Is your favorite MD office or hospital in-network with the new plan? Do your doctors accept the coverage? Are the doctors you want to see accepting new patients? Do you have to choose your hospital and healthcare providers from a network? Do you need to get referrals?
How Does Health Insurance Work?
No one plans to get sick or hurt, but sometimes we need medical care unexpectedly. Unfortunately, in the US, healthcare can be expensive! Health insurance covers some of these costs and offers other important benefits that many people don’t realize
Most importantly, health insurance protects you from unexpected, high medical costs.
You pay less for covered in-network health care, even before you meet your deductible.
You get free preventive care, like vaccines, screenings, and some check-ups, even before you meet your deductible.
The Basics
Allowed Amount: The maximum amount that a health plan will pay for a covered health care service. Also called “negotiated rate,” “allowed charge,” “eligible expense,” or “payment allowance.” If the provider charges more than the plan’s allowed amount, you will have to pay the difference. Even if your provider charges the allowed amount, you may still need to pay a percentage of the cost depending on your health plan (see coinsurance below).
Co-insurance: The percentage of costs of a covered health care service that you pay after you have satisfied your deductible. Coinsurance levels will vary depending on your type of plan. For example, Your health plan’s allowed amount for a doctor’s visit is $100 and your coinsurance is 20%. If you’ve paid your deductible (see below), you pay 20% of $100 or $20. The health plan pays the rest. If you haven’t paid your deductible, you will owe the full amount.
Co-payment: A fixed amount that you pay for a covered health service (for example $20 for a general physical). Also called a copay.
CPT code: Current Procedural Terminology (CPT) code is a five-number code that providers use to bill for a medical procedure. It’s always included on the bill from the provider or in the explanation of benefits from your insurer.
Deductible: A deductible is an amount you pay for medical services or products before your health plan starts paying either a percentage (e.g. 70%) or 100% of an expense. A plan may pay for certain services, like an annual checkup before a person meets the deductible. Some plans have separate deductibles (e.g. a medical care deductible and a drug deductible). Some family plans have an individual deductible and a family deductible. For example, The individual deductible for in-network coverage is $600 and the family deductible is $2800. If the family meets the $2800 deductible, the health plan will cover the expenses of family members who have met their $600 individual deductible. Family members who haven’t met the individual deductible must still pay out-of-pocket until they reach $600.
Explanation of Benefits (EOB): This is an insurer’s explanation of the charges from a medical procedure and how they will be paid. It shows what the provider charges, what the allowed amount is, how much the insurer will pay, and how much the patient will pay.
Formulary: A list of prescription drugs covered by your health plan. The list has groups or “tiers.” The higher the tier for the drug the more you will pay for it. While tiers vary among insurers, a typical drug benefit includes three or four tiers:
Tier 1 usually includes generic medications.
Tier 2 usually includes preferred brand-name medications.
Tier 3 usually includes non-preferred brand-name medications.
Tier 4 usually includes specialty medications, such as biologics.
High Deductible Plans: These plans have lower premiums and higher deductibles. They are combined with a health savings account (HSA) (see below). The funds put into the HSA are tax-free and can be used to pay medical expenses.
Premium: This is the amount you pay monthly for your health coverage.
At Bodywise Physical Therapy, we are experienced with insurance as we talk with them every day! If you have questions on coverage or your plan, don’t hesitate to reach out to us and we can help!
