Brent Ursel PA-C
As we start another year, and many people have to start their deductible all over again (and many State employees have new insurance), I thought I would re- publish a primer on insurance terminology.
Deductible-This is the amount you must pay BEFORE your insurance will kick in. The amounts vary widely and can start as low as $200.00 and go as high as $10,000 (this would be considered a major medical or catastrophic health insurance).
Co-pay-This is a flat fee that you pay for office visits or ER visits. It is often between $25-$75 dollars per visit.
Co-insurance-often a percentage of the total bill that you will pay for office visits. This varies widely by plan and can be anywhere from 0% to 50%.
Out of pocket-This is the maximum amount of money (theoretically, as there a ton of loop holes and exceptions to this one) that you pay out during a calendar year. After you have meet this maximum (often anywhere from $2500-$10,000) your insurance will pay at 100%.
Multiple procedures same day: Watch out for this one. Here’s an example: If you are having a colonoscopy done, you’ve arranged someone to drive you, you’ve done the prep, gone through anesthesia, etc, doesn’t it make sense to have the EGD (camera down the throat to look at the stomach) done at the same time rather than come back at a later date and do this all over again? You would think so. But here is the problem. Many insurance plans will pay 80% for the first procedure, but only 50% for the second and subsequent procedures. So if each procedure cost $5,000, your insurance would cover $4,000 of the first procedure, but only $2500 of the second procedure. This could potentially leave you with a bill of $3,500 that you weren’t expecting. Make sure to ask your provider or insurance company benefits office about multiple, same day procedures, BEFORE you have them done.
Preferred provider: This is a health care provider or clinic that is in-network. They have a contract with the insurance company and are legally obligated to accept pre-negotiated fees. You often have a lower co-pay or co-insurance if you use a preferred provider.
In network/out of network: See preferred provider/preferred facility.
Preferred facility: This is a facility, typically a hospital or surgery center, that has a contract with your insurance company to provide services for a pre-negotiated price. The financial difference between using a preferred facility and non-preferred facility can be huge (some plans only pay 50% for non-preferred). Sometimes, out of pocket limits don’t apply to non-preferred facilities.
Usual and Customary: This is what your insurance thinks/says something should cost. Example: an MRI might cost $5,000. Your insurance company says $1,000 is “reasonable”. If the provider/facility is in network, you pay the copay/co-insurance (80/20 split, so you would owe $200.00, the insurance pays $800) and the facility writes off the balance.
If they are out of network, your insurance will typically pay 80% of “reasonable” (in this case 80% of $1,000 or $800.00), leaving the balance of $4,200 for you to pay.
Prior Authorization-: If you are having any surgery done, CT scans, MRI, etc, this may need to be authorized with your insurance company IN ADVANCE (emergencies are an exception). Failure to have something pre authorized could result in a total denial of the claim, potentially leaving you responsible for thousands of dollars.
EOB: explanation of benefits. This is the statement that you get from your insurance company after a claim for health benefits has been submitted. It outlines what services were billed, what your plan is paying, how much went to deductible, what your provider has to write off because of negotiated contracts, and what you are responsible for.
Preventive care: Most plans are now required to offer preventive services. Some will pay at 100% and these visits are not subject to deductibles or co-pays. Such things often covered under preventive care would include a yearly physical exam, mammogram, pap smear, immunizations, and sometime blood work such as cholesterol and PSA (prostate screening test for men).
Primary Insurance Plan: This is the insurance policy that you have through your employer. This is the insurance plan that gets billed first.
Secondary Insurance: this is an insurance plan that covers you through your spouse or partner; or could be from a retirement program such as State of Alaska, Tricare, Etc). It gets billed after the primary insurance (hence the name-secondary).
You should review your insurance benefit handbook, contact the customer service desk of your insurance provider, or contact your HR person for specific details regarding your insurance policy.