Whether you’re buying your own healthcare insurance for the first time or switching plans after a big life change, you probably have tons of questions. That’s okay. This stuff can be super confusing.
It’s also very necessary. And taking some time to further your understanding of health insurance can have major payoffs.
“Consumers can leave hundreds or even thousands of dollars on the table by getting this choice wrong,” says Amanda Starc, Ph.D., a professor who studies health economics at Northwestern’s Kellogg School of Management.
To help you get it right, we hit up the experts to address some of the most common healthcare insurance questions and provide, for once, some clear, concise answers.
What is a deductible?
A deductible is the amount you must pay for healthcare services before your plan actually kicks in. So, if your deductible is $1,500 (about the average deductible for a single plan offered through an employer) your plan won’t pay for care until you spend that much on covered services.
In some plans, including all plans on the Marketplace, the exception to this is preventive services. These are frequently covered even if you haven’t met your deductible yet. (Don’t worry, we’ll get to preventive care in a minute.)
What is a premium?
This is the actual cost of your plan. Usually, you or your employer will pay your premium monthly, quarterly, or yearly. Your premium is different than your deductible and payments toward your premium don’t count towards your deductible. Good question (and nice try), though.
What is a co-pay?
A co-payment is the fixed cost of a particular covered healthcare service, aka “that fee you pay walking out of the doctor’s office.” The amount varies depending on the service — $20 for your primary physician and $40 for a specialist, for example.
This is, confusingly, not the same as co-insurance. Co-insurance is a percentage — your share of what you owe for covered care. Say your coinsurance is 20 percent and your annual physical would otherwise cost $200. Assuming you’ve met your deductible, you’d pay your copay plus $40 — your 20 percent coinsurance.
“All health plans are required to provide a summary of benefits and coverage,” says Sabrina Corlette, J.D., a research professor at the Center on Health Insurance Reforms. It’s a short document that lists what’s covered by your plan and what’s not. Co-insurance and co-pay amounts will appear here, she says, and sometimes copay fees are right on your insurance card. So you can always know before you go.
What is preventive care?
This refers to services intended to keep you healthy and identify or prevent disease — checkups, counseling (for alcohol misuse, for example), screenings, and shots all fall under this umbrella. See the full list of preventive care services for adults here.
What is an HSA?
An HSA is a bank account that you put money into, pre-tax, for healthcare expenses. The IRS limits how much you can contribute — for 2019, it’s $3,500 per person and $7,000 per family.
Both you and your employer can contribute to an HSA, says Corlette, and you don’t have to count the money as income. Plus, you can withdraw it tax-free for any qualifying healthcare service. The IRS outlines all of these, but your deductible, copays, coinsurance, and prescriptions all qualify. (Teeth whitening, gym dues, and calf implants? Not so much.)
HSAs are often available through employers and high-deductible health insurance plans. (Generally any plan with a deductible of at least $1,350 for an individual or $2,700 for a family.) You can also open one through some banks.
Can I visit any doctor?
Not exactly. Your health insurance plan establishes a network of doctors and hospitals (referred to as “in-network”) and offers them patients in exchange for lower prices, explains Starc. So-called “out-of-network” docs aren’t a part of that pact, so you’ll pay more out of pocket (see below) to see them.
Even if a hospital or medical center is in-network, that doesn’t mean all of its physicians are, Starc cautions. So make sure to double check that your doctor is before you go.
What exactly do I have to pay for out of pocket?
Assuming you’re not talking about your co-pay, co-insurance, or premium, and your deductible has been met, basically, if you don’t see an in-network doctor, you pay. And remember, out-of-network means higher prices.
Fortunately, there’s such thing as an out-of-pocket maximum — the most you’d have to pay in one year not including premiums and spending for services your plan doesn’t cover. For 2019 plans, the out-of-pocket max is $7,900 for an individual plan and $15,800 for a family plan. Different plans might have lower out-of-pocket maximums.
Think your insurance company should have paid for something they didn’t? You can appeal their decision by writing a letter or filling out a form asking them to internally review the charge, says Corlette. A clinical reviewer will assess the initial decision and reevaluate it. If that fails, you can forward the appeal to an external reviewer.
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Is my prescription covered?
That’ll be listed in what’s known as the formulary, the list of drugs covered by your plan, says Corlette. Again, you have the right to an appeal if you ever believe you’ve been unfairly or incorrectly charged for a prescription.
What’s covered in an emergency?
In the case of an emergency, you should always go to the nearest hospital, where you’ll be treated even if that hospital is out-of-network. Under the Affordable Care Act (ACA), plans aren’t allowed to charge you more if you go to the ER of a hospital that doesn’t take your insurance in an emergency, says Corlette.
Unfortunately, she says hospitals can still bill you. And while some state laws protect people from these bills, not all do. Which means, sadly, that even in an emergency you should try to get to a hospital that takes your plan if at all possible.
What is open enrollment?
This is the period every year (usually November through December) when anyone can enroll in a new health insurance plan. However, this isn’t the only time you can get a new plan.
You can also grab health insurance through your employer when you start a new job and if you experience what’s known as a qualifying event, like getting married or losing your previous coverage.
Sadly, finally getting clear answers to all these questions does not count as a qualifying event. But when the time does come for you to make your next healthcare insurance decision, you can be confident that you’re not leaving anything to chance, or any money on the table.
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