In this video we go over the absolute basics of health insurance.
Health insurance is an agreement between you and an insurance company, in which you agree to pay the insurance company a monthly premium, and in exchange the insurance company pays a portion of your medical expenses.
Your monthly premium is a flat dollar amount that doesn’t change dependent on healthcare utilization. Say your premium is $50. If you don’t go to the doctor at all one month, your premium is still $50. If you go to the doctor 10 times in one month, your premium is still $50.
Another really important concept in health insurance is the deductible. The deductible is a fixed dollar amount set by your insurance plan that you’re expected to contribute toward your medical expenses before the plan benefits really starts to cover your expenses. But don’t worry, there are certain expenses that are covered before you meet your deductible!
Preventative care is a great benefit of health insurance. Even before meeting your deductible, all medical services which are considered to be preventative care are fully covered by your insurance – that means they are free to you! These services include annual check ups, vaccinations, certain age-appropriate medical screenings, some prescriptions, and more.
Depending on your insurance plan, for some covered services you will be expected to pay what’s called a copay. A copay is always a flat fee and is typically due to the medical provider at the time of service. For example, your plan may state that you owe $20 for each office visit to see your regular doctor for an illness, injury, or mental health visit. Or you might have to pay a $65 copay for visits to a specialist such as a dermatologist. Some plans offer copay-only services prior to meeting your deductible, this depends on the design of your insurance plan.
For some covered services, you may be expected to pay what’s called coinsurance. Coinsurance is a percentage of the total medical expense that is your responsibility to pay. Typically, the medical provider sends a bill to insurance to pay their percentage, and then sends the remaining bill to you for payment. An example of coinsurance may be seeking care at an urgent care facility, you may be responsible for 40% of the total medical expense. Similar to copays, some plans offer coinsurance-only services prior to meeting your deductible, but again this depends on the design of your insurance plan.
And finally, one great feature of health insurance is the out-of-pocket maximum. Once the amount of money you’ve contributed toward medical expenses totals your out-of-pocket maximum, you are totally off the hook for the cost of covered medical expenses – no more copays or coinsurance!
That’s it, those are the basics! Of course, if you have questions about your health insurance and how these concepts apply, or if you want to know more, reach out to us here at Mountain View Insurance.
