Okay, so you have a health insurance plan which is supposed to make getting healthcare easier, right? So why is it so difficult to use and confusing to understand? While Twin Lakes Counseling does rely on our clients to understand and track their own individual plan and benefits (because each plan is so different!), we are here to help you figure it out.
Here is what we feel you need to know...
Managed (Health)Care is the overarching system that governs healthcare in the United States and is designed to reduce the cost of healthcare for members. While we celebrate healthcare being more affordable and accessible for more people, this very complicated system leaves a lot of room for some shady practices that limit treatment options for members and providers while ensuring maximum profit for insurance companies.
All insurance companies in the U.S. are a part of some form of Managed (Health)Care. And come in three main varieties:
“For profit” health insurance companies (the most common) are businesses owned by shareholders and therefore have a fiscal responsibility to their shareholders to make profits. This means that they may reduce benefits, decline coverage, or charge higher premiums to grow their financial returns year over year. Hm, this puts so many of my interactions with my health insurance company in perspective…
“Government funded” health insurance companies are funded by taxpayers’ dollars resulting in strict eligibility requirements (think Medicaid, Medicare, etc)… and sometimes even stricter / limited options for providers and eligible treatments. But hey, you take what you can get… until it’s not enough? Hm.
“Non-profit” health insurance companies are less common and are known for providing exceptional coverage for primary and preventative care at a lower price than corporate insurance plans. While these are not the same as charities (so making money is essential to their existence), they aren’t as beholden to so many people outside of your health concerns.
While we can talk for days about our broken healthcare system, instead, let's continue with familiarizing ourselves with some common insurance lingo!
Premium: This is the monthly payment you make to your insurance company to keep your benefits. The higher this number, the more coverage you get AND the lower your other payments will be (deductible, copay, coinsurance, etc)
Deductible: This is the total amount of money you must pay out of your own pocket for medical services before your insurance company will begin covering any of the costs. If your deductible is $1,500, then you will be responsible for paying 100% of any services you receive until you have paid a total of $1,500. When you have paid your deductible, then your insurance company will begin paying for more services (but not always all, so check your plan!)
Copay: This is a set amount that you agree to pay to your provider for a specific service (usually $15-$40)
Coinsurance: While a copay is an agreed upon flat rate, coinsurance is paid at an agreed upon percentage of the cost of service. If your coinsurance is 10% and the cost of service is $150, then you will pay $15 to the provider.
Out-of-Pocket Maximum (OOP): While your deductible amount needs to be met before your insurance starts paying for some of the cost of services, your Out-of-Pocket Maximum is the amount you will have to pay before insurance will cover all services at 100%.
“In-Network” Providers: This is a list of providers who are contracted with your specific insurance company and are therefore pre-approved to bill your insurance company directly for any services they provide you.
“Out-of-Network” Providers: This is a list of providers who are not contracted with your specific insurance company. In these cases, you will pay the provider their full rate at the time of service and then submit the Superbill to your insurance company who will then reimburse you a portion of the cost. Keep in mind many plans likely include some out-of-network coverage, so check yours!
Superbill: This is a detailed document that allows clients to bill their insurance company directly, or, just reference for information pertaining to their services such as dates, procedure codes, and total balances.
*Remember, all these numbers and amounts start over from zero at the start of your insurance term year (this “reset date” is usually the start of every New Year). So you will have to pay your deductible and out of pocket maximum every year, each year, before your insurance company starts contributing the associated amounts.
