Traditional Health Insurance
A traditional health insurance plan operates on the system of copayments (copays) and coinsurance. You will pay a monthly premium for the coverage. In addition, you will pay a copay for every doctor visit, as well as trips to the hospital and emergency room. The copays are set, and usually increase when you see a specialist or go to the emergency room.
You may also be required to pay coinsurance on certain procedures such as tests or hospital stays.
The coinsurance is the percentage of the bill that you are responsible for in addition to the copayment for the procedure. For example, if you have 80/20 coinsurance, the insurance company will pay eighty percent of the cost and you will be responsible for the other twenty percent. This coinsurance applies after you have reached any deductible set by your insurance policy.
Many policies have a maximum out of pocket payment limit. Once you reach this limit the coinsurance no longer applies, although you do need to continue to pay your copayments. You will also pay coinsurance on the amount that your insurance has contracted to pay for procedures with the hospital and doctor. For this reason, it is important to pay attention to both your doctor's bills and the insurance statements that you receive outlining the payment amount.
It is important to understand how much a procedure could cost you.
For example, if you had to undergo surgery and stay overnight, you would have to pay your hospital copayment amount, pay the deductible amount if you have not already met it, and then pay your coinsurance amount on the remaining balance of the bill. You can call and talk to a representative at your insurance agency to learn the estimated costs of the procedures before you have them done.
Additionally you should make sure that you get preapproval for most tests and surgeries before you have them done. This can save you money since the insurance agrees to cover the cost. You will also want to make sure that all doctors and anesthesiologist that will be working on you are within your network too.
One of the benefits of a traditional health insurance plan is that it is fairly easy to predict your costs. If you stay within your network, you can can control how much you will pay since the health insurance has worked out lower costs deals with those doctors. It also does not require you to pay as much up front out of your own pocket. This may be a good option if a huge deductible seems daunting to you, and you would avoid seeing your doctor because of it. However, some people prefer a high deductible plan because once they meet the deductible then they no longer need to cover any additional medical expenses. If you know that you will always meet your deductible, and you can find a more affordable option, you may want to consider that option instead of traditional health insurance.
When choosing a plan, it is important to make sure it meets the requirements set up by the Affordable Care Act.
This will protect you from having to pay a fine for not having the proper coverage. Most plans offered by your employer will be covered. If you sign up for health plan through the exchanges, it will also qualify. Most short-term health insurance plans do not qualify for this coverage.