Deductibles, premiums, copayments, and coinsurance are important to know when you sign up for health insurance. Having health insurance can lower your costs even when you have met your deductible.
The following terms are some definitions to keep in mind. It is best for you to directly discuss with your health insurance provider about these items. Most healthcare providers do not have this information.
- Premium: The amount the policy-holder or their sponsor (e.g. an employer) pays to the health plan to purchase health coverage.
- Deductible: The amount that the insured (patient) must pay out-of-pocket before the health insurance company pays its share.
- Co- Insurance: The patient’s share of the costs of a covered health care service, calculated as a percentage (for example, 20%) of the allowed amount (amount approved by the health insurance company) for the service. You pay coinsurance after you have met your deductible. 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 copayment or copay is a fixed payment for a covered service, paid when an individual receives service. Copayment is a payment defined in an insurance policy by the health insurance company and paid by an insured person each time a medical service is accessed.
- An allowed amount is the maximum amount an insurer will pay for a covered health service, the remainder owed by the insured is called “balance billing”.
Once you are seen by a healthcare provider the bill is submitted to the health insurance carrier. The health insurance then determines the share they will pay based on your contract. They also determine what the “allowed amount” for a service is. The healthcare provider has to acknowledge the allowed amount.
E.g: A healthcare provider may bill $300 for a service but according to contracts the “allowed amount” is only $135 then the total amount that the health care provider can collect from the patient is $135. The health insurance company will then determine how much it will pay off this allowed amount and the rest is the responsibility of the patient.
So in this case: Payment by health insurance + Payment by patient= $135
- Why do you not know about my deductible?
This is information delineated in your health insurance contract and not shared with us due to the high number of insurance plans existing today. We can try to verify this by accessing your insurance companies website, but this will tell us the total deductible you have for the year but not how much of the deductible you have paid. Sometimes these verification websites are not working especially in evenings, weekends and holidays.
- I have insurance! how come I have to pay for services I got at your center?
The amount you have to pay to us depends on your insurance company and your contract with them. We do not write the rules. The insurance company determines the allowed amount, copayments, co-insurance, and deductibles. These can vary from person to person even with the same insurance company. It is best to talk to your insurance company to have an idea what you would have to pay.
- What is a typical copayment at your center?
This is determined by your insurance company. Your copayment at our center can vary from the same amount as you would pay at your primary care office to that you would pay at a specialist office. Some insurance companies now have a separate “urgent care” or “walk in” copayment. In either case, the copayment is significantly lower than going to the Emergency Room. It is best to contact your insurance company to clarify.
- Why do I have a separate bill for labs sent to me?
All labs are sent out to an independent lab. These labs bill your insurance directly and again the insurance determines how much it will pay and the rest is the patient’s responsibility. All questions related to laboratory charges should be directed to the Lab performing the labs and your insurance company.