Does insurance terminology and coverage confuse you? Us too sometimes, and we work with insurance companies everyday! We understand that with so much jargon, insurance can be a very confusing thing. We hope to provide a little bit of clarity to help with this confusion by defining a few terms that are often used when discussing insurance coverage.
A deductible is an amount that needs to be paid by you before your insurance company will begin paying claims. After meeting your deductible, some plans will begin to pay for all coverage in full, while other plans will begin to cover a portion of the claims and expect the patient to cover the remainder. This amount resets yearly, some plans reset at the 1st of the year (called yearly plans) while others reset at a certain date throughout the year (called calendar plans). A deductible is an accumulation of almost all payments you make related to your health; you do not have a separate deducible for each doctor office or hospital you visit.
Out of Pocket Maximum/Max Billable Amount/Catastrophic Cap
The out of pocket maximum has several other names it is called based on the insurance company, but no matter what name it goes by it is still the same thing. This is (theoretically) the absolute most you will have to pay for covered medical expenses in a plan year through deductible and coinsurance before your insurance plan begins to pay 100 percent of covered medical expenses. Once met, all of your health insurance costs are suppose to be covered in full by your insurance company. Of course, sometimes a bill will be denied by the insurance company. If the insurance company says they won't pay a bill, then the entity charging the amount may seek payment from the patient.
A copay is a set amount based on what type of doctor or service you are receiving. It can vary between each type of doctor, with specialists and ER visits costing more than a visit to your primary care physician. This amount is generally due regardless of whether the deductible is met or not, and sometimes does not contribute to the deductible. It does, however, contribute to the out of pocket maximum, and once the out of pocket maximum is met then the copay is no longer charged.
Co-insurance is generally the most complicated aspect of insurance costs. A co-insurance is an amount that is generated after the bill has been sent to the insurance company, and is based on both your plan and the amount that the insurance company states is eligible for payment. This benefit does not begin until the deductible is met. Many plans we are are on an 80%/20% plan, with the insurance company paying 80% of an visit. For example, if the health insurance plan's allowed amount for an office visit is $100 and you've met your deductible, your 20% coinsurance payment would be $20. The health insurance plan pays the rest.
A “claim” is the bill that an office sends to the insurance company. It is the amount that the procedure costs, in full. You will usually only hear this term when “a claim is denied”, which means a bill that was sent to the insurance company was rejected. If a claim is denied by an insurance company, then the cost can fall onto the patient regardless of whether an out of pocket amount is met, because it is considered to be not covered by the insurance company. Denied claims also usually do not count towards a deductible total, as they are considered uncovered claims. At All Care, we work hard to get denied claims appealed before sending the bill to the client for payment.
Clear as mud right :)? Here are some examples to help you see how this works in the real world:
Example 1: You have a $60 copay on your plan. Your deductible has not been met. You pay $60 at your visit. The claim goes to the insurance company for $145. The insurance company states that only $125 of the bill is eligible to be paid on. You have already paid $60. The remaining $65 (for a total of $125) will be billed to you since your deductible is not met. No one is charged for the remaining $20. Once you met your deductible, you will only be charged for your $60 co pays until your out of pocket maximum is met.
Example 2: You have a 20% co-insurance. Your deductible is not met. The claim that will be sent to the insurance company is for $160. The insurance receives the claim and decides that only $130 is eligible to be paid on. They pay $0 and you pay the $130 that insurance company approved. No one is charged for the remaining $30.
Example 3: You have a 20% co-insurance. Your deductible is met. The claim that will be sent to the insurance company is for $120. You can estimate that you will owe $24. The insurance company receives the bill and decides that only $100 is eligible to be paid on. They pay $80 and you pay the remaining $20. You pay 20% of the $100 that the insurance company approved and not 20% of the entire bill, hence $20 and not $24. No one is charged for the remaining $20.
Example 4: You have a $60 copay. Your out of pocket maximum has been met. You pay nothing. The claim is $150. The claim gets sent to your insurance company. The insurance company denies the claim. The full costs goes to the patient and you owe $150. You can generally try to negotiate a lower bill or a payment plan.
Example 5: You have a 10% co-insurance. Your deductible is met. The claim that will be sent to the insurance company is for $100. You can estimate that you will owe $10. The claim gets sent to insurance and they determine that $0 is eligible to be paid on. They do not deny the claim, they determine that $0 is eligible to be paid on. You owe $0. In this case, the clinic will more than likely resubmit the claim for payment.
In all of the above situations, All Care will make sure before, during, and after that you understand your coverage and what you will be payment responsible for. Patients with high deductibles or financial situations that make full payment difficult can also work out a payment plan with All Care. We never want lack of coverage to be a deterrent for therapy.
Hopefully this has helped to clear up some confusion. If you still have questions, please don't hesitate to let us know!