Health insurance trends have changed drastically over the last decade, leaving many consumers uncertain about what that plastic card in their wallets is really doing for them.
Whether you are insured through your employer or elsewhere, there are many options to choose from, including high-deductible, low-deductible, HMO and PPO plans. Knowing the difference between them all will help you select the best plan for your individual circumstances.
In general, high-deductible plans will have lower monthly premiums compared to low-deductible plans. Premiums are payments made to your health plan to keep your coverage active. If you are insured through your employer, these premiums are most likely taken out of your paycheck. Keep in mind that paying less per month in premiums may mean higher medical bills throughout the year until the high-deductible is met.
High-deductible plans are typically bundled with a Health Savings Account, or HSA. Pre-tax dollars can be added to your HSA and used for qualified expenses related to your medical care. You can swipe your HSA card for co-pays, deductibles and prescriptions. Each year, any money left over in your HSA rolls over for later – and can even be used in retirement.
A Flex Spending Account, or FSA, can be used in conjunction with a low-deductible plan. The FSA works essentially like the HSA, except you must “use it or lose it.” Money left over at the end of the year does not roll over, so it’s important to be mindful of how many pre-tax dollars you should contribute.
Two additional factors in your health plan include your co-insurance percentage and out-of-pocket maximum (which is not always equal to your deductible). Some plans with fairly substantial deductibles, for example $8,000 for an individual, might have a 100 percent co-insurance and an $8,000 out-of-pocket maximum. This means once you have met your $8,000 deductible, all covered services are paid by insurance at 100% for the remainder of your benefit year.
In another example, you have a $2,000 deductible with a 30 percent co-insurance up to an out-of-pocket maximum of $5,000. You will need to reach that $2,000 deductible in covered charges before your health plan starts pitching in. Once that deductible is satisfied, you will be responsible for 30 percent of the allowed amount (determined by your health plan) until you’ve reached $5,000 total out-of-pocket for the year.
An important rule of insurance: there are always exceptions to the rules. And sometimes there are exceptions to exceptions. For example, most plans will cover routine physician visits and preventive care, such as mammograms and screening blood work, before you’ve met your deductible. Other exceptions to the rules include non-covered charges. For example, if your health plan does not cover medical nutrition counseling and you pay a provider $200 for those services, that $200 does not go towards your deductible or out-of-pocket maximum.
Want to learn more? Attend Northern Arizona Healthcare’s free forum, “Your Healthcare and Your Insurance.” Get help you understanding how your health insurance works. A patient advocate will help you understand your health insurance; ask the right questions before seeking medical treatment; debunk healthcare billing myths; and know the difference between deductibles. The forum will include Q&A time, so please bring your question.
10 a.m. to noon and from 5 to 7 p.m. on Wednesday, June 7, at Flagstaff Medical Center’s McGee Auditorium, 1200 N. Beaver St., Flagstaff.
10:30 a.m. on Wednesday, June 14, at Verde Valley Medical Center, Conference Rooms B and C, 269 S. Candy Lane.
R.S.V.P. is encouraged, but not required. To RSVP, please call Julie Kuhns at 928-213-6674 or email Julie.Kuhns@NAHealth.com.