Let’s start with some basics:

Basic Plan Terminology

Plan Year versus Calendar Year: Your plan will reset every year. The date of the reset can vary. Plans that reset on a calendar year will always reset on January 1. Plans that work off a plan year will reset on the date that the insurance policy initially started.

 

Deductible: You have a certain amount of money that you will be required to pay upfront. This is your deductible. Very often, insurance companies have offset the premium (the monthly amount you pay for the policy) by offering a high deductible. This means people who don’t use their insurance often may save money by paying a lower premium and not paying much into their deductible. Almost all out-of-network policies will include a deductible.

 

In-Network versus Out-of-Network: Your insurance company has contracted with various hospitals, doctors, pharmacies, and medical supply companies to provide you with healthcare needs. These contracted providers are considered “in-network”. Anyone who has not contracted with your insurance company is “out-of-network”. Therefore, your insurance plan coverage will vary based on your in-network or out-of-network provider.

 

Copayment: A copayment is a set dollar amount being paid to a facility or doctor for a specific type of visit. For example, you may have a $0 copayment to see a primary care doctor, but you have a $30 copayment to see a specialist. That means each time you see the specialist, you will need to pay $30/visit.

 

Coinsurance: A coinsurance is a percentage of the cost of the visit being paid by the patient. So let’s say you’re seeing a doctor for a quick visit. Perhaps the insurance company has contracted to pay $100 for that type of visit, and your coinsurance is 15%. That means you’re responsible for 15% of $100 (or $15) for the visit.

 

Out of pocket maximum: Once you’ve hit your maximum out of pocket, your insurance company will pay for 100% of the visit. However, what’s included in the maximum out of pocket can vary from plan to plan. This might mean your deductible and your coinsurance together will go towards your out of pocket maximum.

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