Health insurance is to minimize the cost of preventive care and prevent financial havoc in the case of illness. Healthcare costs are high and deductibles are a very real part of the options when deciding on individual and group plans. The ever-rising cost of healthcare, moreover, has driven insurers and employers to shift much more of the burden to policyholders through higher deductibles and coinsurance and slapping copays onto more services. It can be a challenge just to figure out in advance how much you’d wind up paying out of pocket if you do get sick.
Pay attention to the annual out-of-pocket limit on a policy. Almost always displayed as a flat dollar amount, the term refers to the maximum you have to pay for your care in a given year before the plan picks up your expenses from then on—or so it would seem from the term.
Many plans still impose deductibles, copays, and coinsurance after you reach the supposed limit of your out-of-pocket expenses. Retaining even one of these cost items could vacuum thousands of dollars from your pocket. What’s more, a plan can put a limit on the total amount it pays out in a year. All charges above that maximum benefit are your responsibility, regardless of the stated out-of-pocket limit.
A co-pay is usually thought of as the mere $20, $30, or $40 when you see a doctor. Keep in mind that a co-pay can be hundreds of dollars if it your share of a hospital emergency room visit. Coinsurance, your percentage of the cost of a service, may be a modest 10 percent or it could be the entire 100 percent. It also matters whether the copay or coinsurance is charged before you’ve met your deductible or afterwards. If before, you no longer have to make these payments when you’ve paid off your deductible. If after, the obligation is open-ended and may cost you more.
Be sure to understand that the out-of-pocket limit usually doesn’t include deductibles and co-insurance. Deductibles and coinsurance include prescriptions, physician visits, hospital stays, or any other medical expense. Doctor fees and emergency room co-pays will push your out-of-pocket costs higher.
Co-Pays and Co-Insurance can be confusing and can cause companies and its employees hardships. Liberty Run Benefits offers companies, large and small, advice and programs to ensure that they are educated while offering its employees benefits that are cost effective. Contact Liberty Run Benefits by clicking Request a Quote and we will walk you through the chaos.