Reading Your Health Plan Benefits
Health insurance plans aren’t always easy to understand. When you’re considering a plan, you need to make sure you know exactly what it covers.
Most managed care plans break down benefits by specifying which medical services are covered, and what costs you’ll be responsible for. They’ll also include different levels of coverage for doctors and hospitals in the plan network and outside the plan network.
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Traditional Fee For Service (FFS) plans will specify the services they cover. These plans don’t have provider networks, so there’s only one level of coverage.
Here’s a guide to making sense of a health plan’s benefits:
In-Network vs. Out-of-Network
If you have a managed care PPO or POS plan, you’ll have coverage with a provider network of doctors and hospitals. Your plan will show what the level of coverage you have with care providers both in and out of the network.
All managed care plans provide more coverage with in-network physicians. HMO plans usually don’t provide any coverage for out-of-network providers.
Deductibles and Coverage Maximums
What are out-of-pocket maximums and coinsurance maximums? What about annual deductibles?
- The coinsurance maximum is the annual cap on how much you’ll have to pay in coinsurance. In other words, you’ll be responsible for a percentage of some health care bills until you’ve reached this dollar maximum.
- An out-of-pocket maximum is the most you’ll have to pay for care per year. This maximum usually includes the deductible, copayments, and coinsurance. Once you meet this maximum dollar amount, your plan covers 100% of all bills for the rest of the year.
- The deductible is the amount you have to pay of your medical bills before insurance coverage kicks in. For many routine medical services — such as regular visits to a doctor’s office — the plan will “waive the deductible”. This means the plans provides the full level of coverage, regardless of whether you’ve paid the deductible or not.
Many health insurance plans also have a lifetime maximum — or the total amount the plan will pay toward your medical expenses. The lifetime maximum is usually several million dollars. Most experts suggest choosing plan with a lifetime maximum of over 2 million dollars.
Coverage for Office Visits
You’ll typically be responsible for a copayment or a coinsurance payment when you visit your doctor or a hospital.
- A copayment is the fixed dollar amount of a medical bill that you’ll be responsible for. For example, you may have a $20 copayment for a routine trip to the doctor.
- Coinsurance or the coinsurance rate is the part of a medical bill you pay — but it’s expressed as a percentage. For example, you may be responsible for 20% of the total bill for a trip to the hospital.
“Outpatient” surgery is any surgical procedure where there is no need to stay overnight in a health care facility to recover from the operation — you’re in and out the same day.
Your plan will let you know how much coverage you have for an outpatient surgery. Outpatient surgeries usually require a coinsurance rate.
Hospital and Emergency Care
Depending on your plan and level of coverage, you might be responsible for a copayment or coinsurance for a hospital admission or an emergency room visit.
Some plans waive an ER copayment if you’re admitted into the hospital for further care.
Your plan will also provide a list of inpatient medical services that are covered. An “inpatient” service is one that requires you to stay in a health facility overnight.
Maternity Care Coverage
Many health plans don’t include coverage for maternity care, but there are plans available that cover it. So if you’re looking for health insurance and you’re planning on having a family, make sure you choose a plan with full maternity coverage.
What Else Is Covered?
Here are some other services typically covered by health insurance.
- Lab tests and X-rays usually require coinsurance.
- Prescription drug coverage typically has a copayment. You can find a list of covered drugs on your plan’s formulary.
- Skilled nursing care includes temporary rehabilitation medical services. Skilled nursing professionals do not provide custodial care — which includes everyday tasks such as eating, bathing, and dressing. Custodial care is typically not covered under normal plans. Skilled nursing services usually include a coinsurance payment.
- Physical therapy is the care for rehabilitating your body after an accident or serious illness. Physical therapy usually includes a coinsurance payment.
- Occupational therapy provides care for disabled patients to help them improve skills with daily activities, keep jobs, interact with society, and balance their lives. Occupational therapy also usually includes a coinsurance payment.
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