The insurance industry has created a whole business around confusing consumers with dense language, backwards talk, and insider lingo. But you don’t need to be a rocket scientist to understand health insurance plans. What you need is a way of quickly figuring out “is this plan right for me?”
What’s the secret to doing this?
Learn to love the summary of benefits! The summary of benefits is typically a one page chart that summarizes the main benefits a plan provides and, if you know what you’re doing, it can be decoded at a glance. Understanding basic terms will help you compare and contrast plans across the board:
- Copay: Flat fee you pay for medical care at the time of service. (Ex: $50 for a doctor’s office visit.)
- Coinsurance: You and the insurance company share a percentage of the cost of select medical services. (Ex: your bill for an MRI is $1000. With an 80/20% plan, your insurance company pays $800, and you pay $200.)
- Deductible: Amount you must pay for select (or all) medical services on an annual basis, before the insurance company chips in. Deductibles reset once annually (either on a calendar year or policy year.) Make sure you check with the insurance company!
- In-network: A group of doctors, hospitals, and medical facilities an insurance company has contracted with to provide medical services to individuals enrolled in their plans.
- Out-of-network: A medical doctor, hospital, or facility that is not a preferred provider of medical services under your healthcare plan. You pay more if you go out-of-network.
- Out-of-pocket max: The maximum amount you are responsible to pay for your healthcare expenses in a year (from your own pocket), not including premiums. Typically, the out-of-pocket max is the plan deductible + any coinsurance amount.
Okay, I know my basic terms. I’m ready to shop! Find Your Plan
Are there other choices for coverage? Health Savings Accounts
