Do you understand the deductibles of your health insurance policy?
Does anyone?
Perhaps no aspect of health insurance is as confusing as understanding what the patient will pay and what the insurance company will pay.
Knowing your Deductibles, Out-of-pocket costs, Maximums, Copayments, In-network and out-of-network costs can be very difficult.
Tune into SMG radio today as Carolyn Dodd is here to help you understand you insurance.
Selected Podcast
Understanding Your Deductibles
Featured Speaker:
Carolyn Dodd
Carolyn Dodd is the manager of patient accounts at Summit Medical Group and has more than a decade of experience in working with patients about issues of health insurance. Transcription:
Understanding Your Deductibles
Melanie Cole (Host): Do you understand the deductibles of your health insurance policy? Of course you don’t. Perhaps no aspect of health insurance is as confusing as understanding what the patient will pay and what the insurance company will pay. My guest today is Caroline Dodd. She’s the manager of patient accounts at Summit Medical Group. Welcome to the show, Caroline. So, let’s start with some real basics because this is such a big, huge topic. What is a deductible?
Caroline Dodd (Guest): Absolutely. A deductible is the amount that you will pay for your healthcare services before your health insurance begins to pay anything. So, if your amount is $1500, basically you will have to pay that $1500 in total before your carrier begins to pay whatever percentage they’re responsible for and then you are responsible for the remaining percentage.
Melanie: How are deductibles figured out? How do you know what your deductible is?
Caroline: It’s best for you to ask those questions when you are selecting your plan. Most patients sometimes require or request that the provider know what their deductibles are, but when you’re seeking out insurance health coverage, ask the question. They will tell you it’s based on the plan that you choose.
Melanie: So then, if you’ve paid your deductible--and you use the amount $1500—
Caroline: Yes.
Melanie: If you know that is your deductible and you have to pay for services up to $1500, what happens then? How do you know what your insurance company will pay after you’ve met that deductible?
Caroline: Once you select your plan in the beginning, and it should be explained to you that if you have a deductible what your percentage will be. Your percentage may be 30% and they’ll pay 70% after you meet your deductible. That turns into a co-insurance. Co-insurance is: I have a $1500 deductible; I’ve met that. Now, my plan says that they will pay 70%. I am responsible for 30%. As I seek services and have services, when those services are processed with my insurance carrier, the 70% they will pay and then the 30%--my explanation of benefits will deem me responsible for that. There are certain basic services that are covered under deductibles and co-insurances.
Melanie: That’s my next question. How do you know what services are covered that you will have to pay to meet your deductible and what services are not going to be covered under your deductible?
Caroline: It’s kind of tricky but there are basics out there whereas regular hospitalization, surgery procedures, typically those are applied to deductibles first. Then, you may run into lab tests, MRIs, CT scans, surgical costs and things of that nature that may also be applied to your deductible. Basically, if you want to use it as a guide saying that regular, routine services are not normally covered or processed towards a deductible, but diagnostic procedures, more than likely, some of those will be.
Melanie: So, that gets us into another confusing area: the co-pay. What is the difference between co-insurance and a co-pay?
Caroline: Some people get that confused as far as co-pay versus co-insurance. Just remember that they are not the same thing. Your co-pay is that fixed amount that you have to pay when you go into a doctor’s office and that is indicated on your card. More than likely it will be a $20 or a $15 or $10 co-payment. Co-insurance, again, is that percentage that you will have to pay once you’ve met your deductible.
Melanie: Then co-pay goes toward the office and co-pay does not go towards your deductible if you pay that $10 or $15 – that does not get counted off on that $1500 deductible?
Caroline: Absolutely. Co-pay go towards your office visit and co-insurance goes towards those bigger procedures and those diagnostic procedures that your carrier may deem and process to go towards your co-insurance.
Melanie: If you pay a co-pay for a well visit, for example, Caroline, then is there more payment expected if you’ve paid your doctor’s office $40 – your co-pay – then, for that well visit will you still receive a bill? Or is that $40 pretty much what you pay?
Caroline: The $40 is pretty much what you pay. But, basically, for most plans in general a well visit co-pay is not required.
Melanie: So, then when does a co-pay kick in?
Caroline: A co-pay kicks in if I go to the doctor for a sick visit. More than likely, again, that is when it only kicks in. If I go to the doctor today and I’m just going for a routine exam, most plans allow you to have one routine exam and no co-payments are required for that. Then, all of these other services that you may go to the doctors for – if it’s a diagnostic or a sick visit, as we call it – then, more than likely, you will be responsible for a co-payment.
Melanie: So, aside from that yearly wellness or preventive visit, co-pays are when you go in for a sick visit. What about a specialist?
Caroline: A specialist, yes. When you go in to see a specialist as well, there is a separate co-pay and those co-pays tend to be slightly higher. Again, that should be indicated on a subscriber’s card indicating whatever their co-payment insurance responsibility is for a specialist.
Melanie: How do you decide your deducible? Is that based on your monthly premium that could be lower if you’re willing to have a higher deductible? How does somebody work that out for their budget?
Caroline: In choosing a plan, you want the best value for your money, basically. So, you have to ask yourself which is better: a higher deductible plan or a lower deductible plan. For the most part, to get a low premium monthly most people choose a high deductible plan. It’s the opposite for families who may have kids in sports or someone who has any type of chronic health problem. More than likely, they will probably choose a low deductible plan for those active families. It’s basically a choice for the subscriber, the consumer. They just have to do the research and ask those questions and make the best plan and best choice for them.
Melanie: When we’re looking at healthcare plans and going over whether you’re going through an exchange or if it’s an employer plan and you look at the family, is there a different deductible for each person in the family? Does it count together as a total family deductible that you have to meet before anybody’s co-insurance is paid?
Caroline: There are plans that do have family deductibles and they also have individual deductibles. More than likely, when you’re in a hospital those family deductibles count that way as opposed to going to a doctor where the individual deductibles are applied in that aspect. But, yes, there are deductibles for families as well as individuals.
Melanie: So now, give us your best advice in the last few minutes, Caroline, about sorting out deductibles, co-insurance, co-pay, and how to choose the right plan for you.
Caroline: I would certainly suggest that you ask the questions when you are choosing the plan. Basically think of what your needs are for yourself and your family. If you, again, have a family who you think and feel that you will be going to the provider constantly, then you would look for something that better suits your needs such as a lower deductible plan. If you’re looking for a high deductible plan, for whatever those aspects are in regards to that, then that choice would be for you. Basically, it’s what your choices are, what your needs are, ask those questions and make sure that you understand and, if not, then make sure you ask someone so they can explain it to you: what your deductible is; what does it mean; when will you have to pay it and what your out of pocket responsibility would be.
Melanie: So, I’d like to just touch on that. We still have a few minutes. What is out of pocket responsibility? And people hear there’s a max on that or “once I’ve hit my out of pocket expense”. Tell us about that.
Caroline: Your out of pocket expense is a set amount you hit that with the insurance carrier--once that is paid--they are going to definitely pay everything at 100%. So, you have your deductible. You have your co-pay. You have your co-insurance. If I have, let’s just say a $1000 out of pocket max, once I meet that paying that out of my pocket, then my insurance carrier will pay any other balances that I may have at 100%.
Melanie: And just to clear this up for the listeners because I found this part confusing when I was dealing with all of this – your out of pocket costs are over and above that deductible number, correct?
Caroline: Yes, it is.
Melanie: So, if your deductible is $1500 and your out of pocket max is $1000 then before they will pay at 100%, you’re paying $2500.
Caroline: Absolutely.
Melanie: That is really confusing for a lot of people. Just to finish up. What do you say is preventive care? What do you consider, what do the insurance companies consider preventive care?
Caroline: Preventive care is, lots of education I would say, and, basically, having those routine services that you’re keeping check on your health and making sure that you’re preventing any type of further downgrade of your health. You come in for your annual wellness. For the ladies, they come in for their annual visit with their gynecologist. They may bring the children in for their annuals. That is the preventive care. We’re preventing any type of future bigger issues in regards to your health. And, normally lot of those are covered for most carriers. They allow those.
Melanie: That’s your screenings and your immunizations and your other preventive services.
Caroline: Absolutely.
Melanie: Thank you for clearing this up, Caroline. This was really great information. Thank you so much for being with us. You’re listening to SMG Radio. For more information you can go to SummitMedicalGroup.com. That’s SummitMedicalGroup.com. This is Melanie Cole. Thanks so much for listening.
Understanding Your Deductibles
Melanie Cole (Host): Do you understand the deductibles of your health insurance policy? Of course you don’t. Perhaps no aspect of health insurance is as confusing as understanding what the patient will pay and what the insurance company will pay. My guest today is Caroline Dodd. She’s the manager of patient accounts at Summit Medical Group. Welcome to the show, Caroline. So, let’s start with some real basics because this is such a big, huge topic. What is a deductible?
Caroline Dodd (Guest): Absolutely. A deductible is the amount that you will pay for your healthcare services before your health insurance begins to pay anything. So, if your amount is $1500, basically you will have to pay that $1500 in total before your carrier begins to pay whatever percentage they’re responsible for and then you are responsible for the remaining percentage.
Melanie: How are deductibles figured out? How do you know what your deductible is?
Caroline: It’s best for you to ask those questions when you are selecting your plan. Most patients sometimes require or request that the provider know what their deductibles are, but when you’re seeking out insurance health coverage, ask the question. They will tell you it’s based on the plan that you choose.
Melanie: So then, if you’ve paid your deductible--and you use the amount $1500—
Caroline: Yes.
Melanie: If you know that is your deductible and you have to pay for services up to $1500, what happens then? How do you know what your insurance company will pay after you’ve met that deductible?
Caroline: Once you select your plan in the beginning, and it should be explained to you that if you have a deductible what your percentage will be. Your percentage may be 30% and they’ll pay 70% after you meet your deductible. That turns into a co-insurance. Co-insurance is: I have a $1500 deductible; I’ve met that. Now, my plan says that they will pay 70%. I am responsible for 30%. As I seek services and have services, when those services are processed with my insurance carrier, the 70% they will pay and then the 30%--my explanation of benefits will deem me responsible for that. There are certain basic services that are covered under deductibles and co-insurances.
Melanie: That’s my next question. How do you know what services are covered that you will have to pay to meet your deductible and what services are not going to be covered under your deductible?
Caroline: It’s kind of tricky but there are basics out there whereas regular hospitalization, surgery procedures, typically those are applied to deductibles first. Then, you may run into lab tests, MRIs, CT scans, surgical costs and things of that nature that may also be applied to your deductible. Basically, if you want to use it as a guide saying that regular, routine services are not normally covered or processed towards a deductible, but diagnostic procedures, more than likely, some of those will be.
Melanie: So, that gets us into another confusing area: the co-pay. What is the difference between co-insurance and a co-pay?
Caroline: Some people get that confused as far as co-pay versus co-insurance. Just remember that they are not the same thing. Your co-pay is that fixed amount that you have to pay when you go into a doctor’s office and that is indicated on your card. More than likely it will be a $20 or a $15 or $10 co-payment. Co-insurance, again, is that percentage that you will have to pay once you’ve met your deductible.
Melanie: Then co-pay goes toward the office and co-pay does not go towards your deductible if you pay that $10 or $15 – that does not get counted off on that $1500 deductible?
Caroline: Absolutely. Co-pay go towards your office visit and co-insurance goes towards those bigger procedures and those diagnostic procedures that your carrier may deem and process to go towards your co-insurance.
Melanie: If you pay a co-pay for a well visit, for example, Caroline, then is there more payment expected if you’ve paid your doctor’s office $40 – your co-pay – then, for that well visit will you still receive a bill? Or is that $40 pretty much what you pay?
Caroline: The $40 is pretty much what you pay. But, basically, for most plans in general a well visit co-pay is not required.
Melanie: So, then when does a co-pay kick in?
Caroline: A co-pay kicks in if I go to the doctor for a sick visit. More than likely, again, that is when it only kicks in. If I go to the doctor today and I’m just going for a routine exam, most plans allow you to have one routine exam and no co-payments are required for that. Then, all of these other services that you may go to the doctors for – if it’s a diagnostic or a sick visit, as we call it – then, more than likely, you will be responsible for a co-payment.
Melanie: So, aside from that yearly wellness or preventive visit, co-pays are when you go in for a sick visit. What about a specialist?
Caroline: A specialist, yes. When you go in to see a specialist as well, there is a separate co-pay and those co-pays tend to be slightly higher. Again, that should be indicated on a subscriber’s card indicating whatever their co-payment insurance responsibility is for a specialist.
Melanie: How do you decide your deducible? Is that based on your monthly premium that could be lower if you’re willing to have a higher deductible? How does somebody work that out for their budget?
Caroline: In choosing a plan, you want the best value for your money, basically. So, you have to ask yourself which is better: a higher deductible plan or a lower deductible plan. For the most part, to get a low premium monthly most people choose a high deductible plan. It’s the opposite for families who may have kids in sports or someone who has any type of chronic health problem. More than likely, they will probably choose a low deductible plan for those active families. It’s basically a choice for the subscriber, the consumer. They just have to do the research and ask those questions and make the best plan and best choice for them.
Melanie: When we’re looking at healthcare plans and going over whether you’re going through an exchange or if it’s an employer plan and you look at the family, is there a different deductible for each person in the family? Does it count together as a total family deductible that you have to meet before anybody’s co-insurance is paid?
Caroline: There are plans that do have family deductibles and they also have individual deductibles. More than likely, when you’re in a hospital those family deductibles count that way as opposed to going to a doctor where the individual deductibles are applied in that aspect. But, yes, there are deductibles for families as well as individuals.
Melanie: So now, give us your best advice in the last few minutes, Caroline, about sorting out deductibles, co-insurance, co-pay, and how to choose the right plan for you.
Caroline: I would certainly suggest that you ask the questions when you are choosing the plan. Basically think of what your needs are for yourself and your family. If you, again, have a family who you think and feel that you will be going to the provider constantly, then you would look for something that better suits your needs such as a lower deductible plan. If you’re looking for a high deductible plan, for whatever those aspects are in regards to that, then that choice would be for you. Basically, it’s what your choices are, what your needs are, ask those questions and make sure that you understand and, if not, then make sure you ask someone so they can explain it to you: what your deductible is; what does it mean; when will you have to pay it and what your out of pocket responsibility would be.
Melanie: So, I’d like to just touch on that. We still have a few minutes. What is out of pocket responsibility? And people hear there’s a max on that or “once I’ve hit my out of pocket expense”. Tell us about that.
Caroline: Your out of pocket expense is a set amount you hit that with the insurance carrier--once that is paid--they are going to definitely pay everything at 100%. So, you have your deductible. You have your co-pay. You have your co-insurance. If I have, let’s just say a $1000 out of pocket max, once I meet that paying that out of my pocket, then my insurance carrier will pay any other balances that I may have at 100%.
Melanie: And just to clear this up for the listeners because I found this part confusing when I was dealing with all of this – your out of pocket costs are over and above that deductible number, correct?
Caroline: Yes, it is.
Melanie: So, if your deductible is $1500 and your out of pocket max is $1000 then before they will pay at 100%, you’re paying $2500.
Caroline: Absolutely.
Melanie: That is really confusing for a lot of people. Just to finish up. What do you say is preventive care? What do you consider, what do the insurance companies consider preventive care?
Caroline: Preventive care is, lots of education I would say, and, basically, having those routine services that you’re keeping check on your health and making sure that you’re preventing any type of further downgrade of your health. You come in for your annual wellness. For the ladies, they come in for their annual visit with their gynecologist. They may bring the children in for their annuals. That is the preventive care. We’re preventing any type of future bigger issues in regards to your health. And, normally lot of those are covered for most carriers. They allow those.
Melanie: That’s your screenings and your immunizations and your other preventive services.
Caroline: Absolutely.
Melanie: Thank you for clearing this up, Caroline. This was really great information. Thank you so much for being with us. You’re listening to SMG Radio. For more information you can go to SummitMedicalGroup.com. That’s SummitMedicalGroup.com. This is Melanie Cole. Thanks so much for listening.