Health insurance is confusing. We've clarified it for you in this infographic with simple explanations of the most important terms you need to know.
When it comes to insurance, you need to know what you pay just to have insurance, as well as when (and what) health care costs you'll be responsible for paying for – including things like doctor visits, emergency room care, prescriptions, and more.
Your Premium is your monthly insurance bill. If you're lucky enough to have group coverage, then your employer may pay some or all of this; otherwise, it's a monthly expense just like your phone and cable bills.
If you qualify, you may get a Subsidy, which is a discount off of your monthy premium. The subsidy is a tax credit and is estimated at the beginning of each year based upon your previous year's income. If you end up making a lot more money during the current year, you may be responsible for paying the subsidy back, so be sure to estimate your income accurately!
When it comes to paying for your doctor visits, prescriptions, and other health care needs, there are several terms you need to know.
First, Covered Services are preventative care visits and prescriptions your insurance plan may pay for. Not all plans include Covered Services, but many do, because insurance companies would rather pay for wellness needs (called Preventative Care) than to fix something that goes undiagnosed and ends in a major medical event, such as a heart attack. Be sure to take advantage of the Covered Services your plan has – not only will you be healthier, but so will your pocketbook (because you'll pay for less as well)!
Your Co-pay is a fixed amount or percentage you pay for doctor visits and/or prescriptions. Your insurance pays the difference to the Provider (doctor, clinic, hospital, or pharmacy).
Your Deductible is the amount you pay to hospitals, clinics, and pharmacies before your insurance "kicks in" and starts paying. For many people on their own individual plan, this number is often $5,000 to $10,000, but can be much lower, depending upon your specific health care needs and income level.
Once you've reached your Deductible, however, you're not necessarily done paying! You're still responsible for your Co-Insurance percentage until you've reached your Out-of-Pocket Maximum for the year. When a bill comes in the mail, your insurance will be responsible for a certain percentage and you'll be responsible for the remainder. When considering a health insurance plan, be sure to identify this number, so you know how much you would be expected to pay out of pocket in the event of a major medical event!
There are many other terms to know when it comes to insurance, but these are some "big wins" when it comes to insurance and health care costs. We'll be posting about more in the future, so stay tuned!
In the meantime, if you still have questions, contact your local Member pharmacy for further explanations regarding what you need to know about your health insurance plan and health care costs.
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