How do I figure out what costs my insurance covers?
Updated: Sep 11
Different Types Of Insurances
When it comes to health insurance we know that it helps us pay less for those medical services that are important to our everyday life. This can mean helping us get chiropractic care, get a necessary surgery, see a professional about medication prescriptions, or see a mental health professional for therapy. However, did you know that depending on the insurance type you are using there are different benefits, costs, and sometimes more restrictions?
To further understand your specific situation it is important to know which type of insurance plan you are on. There are the following types of insurance plans:
Commercial - This type of insurance is when you are being insured on your own without any assistance from the government, or employer. Typically, commercial health insurance plans are the most costly because they ask you to pay the full premium amount.
Employer Based - This type of insurance is when you are being insured on your own with financial assistance from your employer. Typically, employer health insurance plans are the are more financially viable since part of the cost is being covered by your employer. These insurance plans may come with more benefits compared to a standard commercial insurance, but you should read about the plan thoroughly to know for sure. Employer based plans can be "fully insured" or "self-insured" (for more details check out this description here).
Medicaid - "Insurance program that provides free or low-cost health coverage to some low-income people, families and children, pregnant women, the elderly, and people with disabilities. Many states have expanded their Medicaid programs to cover all people below certain income levels. Whether you qualify for Medicaid coverage depends partly on whether your state has expanded its program. Medicaid benefits, and program names, vary somewhat between states.
You can apply anytime. If you qualify, your coverage can begin immediately, any time of year." (healthcare.gov)
Medicare - "Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD). There are four parts to medicare insurance:
Part A - Hospital Insurance
Part B - Medical Insurance
Part C - Medicare Advantage Plans (Hosted by Commercial Insurance Companies)
Part D - Prescription Drug Coverage"
Different Forms of Cost Sharing
To help us make sure we are getting the care we need insurance companies take on a portion of the "financial risk" involved in your treatment. They accomplish this by having members pay a premium so the insurance company can then pay for its' members' care provided by health professionals.
Insurance companies will assist in assuming some of the "financial risk" by offering plans with different levels of cost associated on the member's part and insurance plan's part. Each of these plans can have different levels of coverage, responsibilities, and premiums. All of these factors help determine what the member's "cost sharing charge" at the time of service with the provider (what you pay the health professional). The three types of "cost sharing charges" are:
Deductible - "A deductible is the amount that a health insurance plan enrollee must pay before the plan starts to pay for most covered items and services. The deductible is set on a yearly basis. For example, if a plan has a $1,000 deductible, an enrollee will generally have to pay the full charge (or total cost) for most medical services until she has spent $1,000. Once the deductible has been met, if the enrollee receives additional medical care during the same year, she would not have to pay the full charge for those additional items and services. The health insurance plan would pay a portion, and the enrollee would pay a portion based on the copayments and coinsurance that apply to the service." (Health Reform)
Coinsurance - "Coinsurance is a fixed percentage of the allowed amount for a covered item or service that an enrollee must contribute (see below for a definition of what is an allowed amount). For example, a plan may require a plan enrollee to pay 30 percent of the allowed amount for lab tests. The plan would pay the remaining 70 percent of the charge." (Health Reform)
Copayment - "A copayment is a fixed dollar amount that enrollees must pay toward the cost of a medical item or service that they use and that the health insurance plan covers. Copayments are common for prescription drugs and seeing a physician. An example of a copayment is when the enrollee pays $10 for a prescription drug and the plan pays the rest of the cost." (Health Reform)
(DCD), D. (2015, August 21). What is Medicare Part C? Retrieved August 07, 2020, from https://www.hhs.gov/answers/medicare-and-medicaid/what-is-medicare-part-c/index.html
Admin. (2020, August 05). Key Facts: Cost-Sharing Charges. Retrieved August 07, 2020, from https://www.healthreformbeyondthebasics.org/cost-sharing-charges-in-marketplace-health-insurance-plans-answers-to-frequently-asked-questions/
Downs, B. (2019, July 09). Fully Insured Plans vs. Self Insured Plans. Retrieved August 07, 2020, from https://www.bbgbroker.com/fully-insured-plans-vs-self-insured-plans/
Medicaid - HealthCare.gov Glossary. (n.d.). Retrieved August 07, 2020, from https://www.healthcare.gov/glossary/medicaid/
What's Medicare? (n.d.). Retrieved August 07, 2020, from https://www.medicare.gov/what-medicare-covers/your-medicare-coverage-choices/whats-medicare