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    PAYING FOR HEALTH CARE:

    A GUIDE TO HEALTH INSURANCE COSTS

    To put it simply, there are two ways you can pay for health care services:

    • Pay the full price each time you visit your doctor. This is often called “self-pay.”
    • Make a monthly health insurance payment, which lowers the amount of money you have to pay for medical care.

    Having health insurance doesn’t mean that you will get health care for free. You still need to pay for your insurance each month, and you may be responsible for other costs, depending on your plan. This guide will help you learn more about those costs and what they mean.

    PREMIUM

    A premium is a payment you make each month for your health insurance plan. Think of it like an electricity bill or gym membership fee—it’s what keeps your health insurance plan active and working. Your premium helps cover things like prescription medication, procedures, and doctor visits.

    How much does a premium cost?
    There are a lot of factors that influence how much your premium will cost. These could include the number of people on your insurance plan, the type of plan you pick, your personal health risk, and more. You will always know what your premium will be before picking an insurance plan.

    DEDUCTIBLE

    A deductible is how much you must pay for health care services out of your own pocket before your health insurance plan will pay. Just like your premium is a monthly responsibility, your deductible is a yearly responsibility.

    How do deductibles work?
    Some insurance plans have high deductibles and low monthly premiums, while others have low deductibles and higher premiums. No matter what type of plan you have, all deductibles work the same. Here’s an example:

    Jane Doe was having sharp stomach pains, so she went to her nearest urgent care. A few weeks later, she got this bill in the mail.

    Cost Guide Bill Example

    If Jane has $500 left in her deductible for the year, she would pay $500 of this bill, and her insurance would help cover the remaining $455. But if Jane had $1000 left in her deductible for the year, she would be responsible for the full bill.

    Once Jane has paid her deductible, she may also have copays or coinsurance to help cover future medical bills.

    COPAY

    To help keep your health care costs down, some insurance plans have copays. These are fixed amounts that you pay each time you get a medical service.

    For example, the copay for an appointment with your primary care provider may be $25. An appointment with a specialist may be $50, and an urgent care visit copay may be $75.

    Sometimes copays apply to your deductible, and other times you pay a copay only AFTER you have paid your deductible. If you don’t know what your copay is, check your ID card or plan documents.

    COINSURANCE

    Coinsurance is another way to keep your health care costs down once you have paid your yearly deductible. Instead of a fixed amount like a copay, coinsurance uses percentages. For example, let’s say you have a 20% coinsurance. That means once you have met your deductible, you will pay for 20% of the bill, and your insurance company will pay for the remaining 80%.
    You will keep paying your coinsurance until you have reached your out-of-pocket maximum.

    DIFFERENCE BETWEEN COPAYS AND COINSURANCE

    COPAY
    • Fixed dollar amount
    • Can sometimes count toward your deductible
    • Paid at the time of service
    COINSURANCE
    • Dollar amount varies—you pay a percentage of the cost
    • Is paid only AFTER you have paid your deductible
    • Paid after you receive your service (you will get your amount owed in a bill from your health care provider)

    OUT-OF-POCKET MAXIMUM

    Your out-of-pocket maximum is a limit that your insurance sets for how much money you will actually pay in a year for health care. Your copay, deductible, and coinsurance all count toward this out-of-pocket maximum. Premiums and expenses paid toward services that aren’t covered under your insurance plan are not included in your out-of-pocket total.

    Once you have hit the out-of-pocket limit for health care spending, your insurance company will pay 100% of your health care costs for the rest of the year. No matter what, you will never pay more than this amount for covered health care services.

    Every health plan is different. The best way to understand how you are going to pay for health care and health insurance is by referring to your plan documents or benefit summary. If you still need help, call your health plan. They can provide specific information for you and your family so you can know just how much you should expect to pay.

    Questions about Plans?