Understanding Your Health Insurance Benefits

Health insurance is confusing. There are almost as many exceptions as there are rules. We’ll go through the rules first and then a few of the most common exceptions to look out for. But before we dive in, it can be helpful to break it down into phases. Depending on the exact numbers of your plan and how much you spend on care in a year, there are three pretty distinct phases of how your insurance company will split costs with you.

During the deductible phase, the cost of your case is mostly on you. Apart from a few case-by-case exceptions, you will be paying for any care you receive from your own pocket. Once (if) you spend enough to met your deductible, you enter the cost sharing phase. During this time, you and your insurance company will split costs according to the specifics of your insurance plan. Once your personal spending has exceeded the amount of your out-of-pocket maximum, the financial responsibility of any additional healthcare you receive should be taken care of by your insurance company.

At the end of your insurance calendar year, everything resets, and you re-enter the deductible phase.

1. Deductible Phase

Your plan’s deductible is the amount that you have to pay out-of-pocket before your insurance company will begin to share the cost of your healthcare according to proportions outlined by your percent coverage. Your deductible resets at the beginning of the insurance plan year, which often coincides with the new calendar year.

2. Cost Sharing

The Difference Between Coinsurance & Percent Coverage

After you have met your deductible, the real benefits of maintaining insurance will start to kick in. This is the cost sharing, or coinsurance, phase. The insurance company will help cover the costs of any qualifying healthcare you receive from now till the end of your insurance plan year.

There are two terms you should be aware of when it comes to your plan’s cost sharing agreement: percent coverage and coinsurance. Percent coverage describes the proportion of the costs your insurance company is responsible for. If your percent coverage is 80%, the insurance company will pay for 80% of the cost incurred; you are responsible for the other 20% out-of-pocket. Coinsurance describes the proportion you are responsible for. If you’re percent coverage is 80%, your coinsurance is 20%. You should be able to find your plan’s specific percent coverage or coinsurance on your insurance.

When using PriceMedic’s personalization tool, it’s important that the value you input is your percent coverage. If your card lists a coinsurance rate, you will need to do the conversion.

Some plans have multiple rates for coinsurance or percent coverage which apply to different types of care. For example, your plan might have a percent coverage of 70% for primary care, but only 50% for care rendered by specialists. Learn more about common exceptions for insurance benefits.

Copayments

During the coinsurance phase, you may also be responsible for out-of-pocket copayments (commonly abbreviated as copays). A copayment is a flat fee you pay each time you access care after you’ve paid your deductible. You pay your copay in addition to whatever proportion you’re responsible for as outlined by your plan’s percent coverage.

Not all plans require copayments. Some plans have exceptions for certain types of care (most commonly a yearly well-visit to a primary care provider). Some plans have different copayment amounts for different types of care. Learn more about common exceptions for insurance benefits.

Out-of-Pocket Maximums

Your plan’s out-of-pocket maximum is the maximum amount you can spend on qualifying care during your plan’s calendar year before your insurance company should start to foot the entire bill. Many policyholders will not reach their out-of-maximum in a given year, but out-of-pocket costs can add up long before the maximum is reached. According to Kaiser Family Foundation, out-of-pocket maximums averaged just above $4,000 for plans provided by employers in 2021.

Exceptions to look out for...

Preventative Care

Many insurance plans have special exceptions surrounding healthcare the insurance company considers preventative. Sometimes care qualifying as preventative is exempt from copay requirements or will be covered by your insurer before you have met your deductible. The definition of preventative care varies by insurer and by plan, so be sure to check on the specifics of you plan.

Generally, the safest bet for care that counts as preventative are services rendered by a primary care provider during yearly well visits like routine lab testing, screenings, vaccines, and counseling. UnitedHealthcare defines routine physical exams, immunizations, well-child, and certain types of imaging as preventative care. Aetna includes all of these plus some kinds of gynecological care as well as a broader scope of screenings for patients they deem to be at higher risk. You can find Aetna’s complete definition of preventative care here.

Primary Care Providers

Care rendered by primary care providers is another common exception to the rules. United defines primary care providers as specialists in family medicine, pediatricians, geriatricians, and internal medicine physicians. Cigna also counts gynecologists as primary care providers whereas Anthem seems to exclude pediatricians. Usually primary care providers are physicians (MD or DO), but nurse practitioners and physician assistants who specialize in an area of primary care are also common choices.

Specialists

Some plans have special stipulations surrounding visits to specialized providers like surgeons, dermatologists, ophthalmologists, neurologists, and more. In particular, some plans require that you receive a referral from a primary care provider before care from a specialist qualifies for the cost sharing agreements of your insurance plan.

Emergent Care

The rules around emergency care are usually split into two categories: visits to the emergency department of a hospital and visits to stand alone Urgent Care clinics. Changing out-of-pocket responsibilities according to the number of visits in the year is also common. Often, insurance companies will share more of the cost for the first couple visits compared to additional visits.

Premiums

Premium is a term often tied up with discussions of health insurance benefits, but premiums are not themselves benefits. Your plan’s premium is the amount you pay each month to maintain your insurance plan’s benefits. Think of it like a subscription fee paid by you, the policyholder. If you receive health insurance through your employer, usually your employer helps cover part of the premium as a benefit of your employment.

PriceMedic is a search tool to help Americans find better prices on their healthcare. We maintain a database of billions of prices for healthcare from well-care to therapy to lab testing all available on pricemedic.com. In-network prices for the exact same procedure can vary up to 90%. To shop prices personalized to your insurance plan and find the most affordable options for you, create an account today.