Do you find that many of those terms your health insurance company throws around are confusing? If you do, you are not alone.
A 2013 Health Reform Monitoring Survey found that “almost two-thirds (60.1 percent) of those most likely to use the Marketplaces to purchase coverage say they are not too confident or not at all confident in their understanding of at least one concept related to health insurance.”1
Let’s go over the five terms these folks were unclear on.
This is the amount of money you pay each month to have health insurance. It should stay the same for an entire year, as it is illegal for an insurance company to raise the rate mid-contract.
“The average employer has workers pay 28 percent of their premium out of their paychecks. The company then covers the rest of the bill, paying the insurance company directly.”2
A deductible is the amount you pay out of your pocket for health care services before your health insurance kicks in to pay any part of the fees. That means you pay 100 percent of the cost of your health services until you reach that dollar amount, e.g. $2,000 deductible a year.
Afterwards, your health insurance will pay a certain percent of the costs that was decided when the contract was signed.
A co-pay is a predetermined amount of money you will need to pay in order to see a doctor or to buy a prescription, even if your insurance pays the rest of the bill.
For example, you may have a $30 co-pay every time you see your doctor. At the same time, you could have a $250 co-pay to go to the emergency room or a $10 co-pay for prescriptions. The co-pays are paid for each health care service you seek.
Co-insurance is the part you are expected to pay after you have met your deductible. If your deductible is $2,000 a year, then once you have paid the $2,000 out of your pocket, you and your insurance company will share your health care visit costs.
For example, let’s say your doctor charges you $100 for a skin biopsy.