In order to understand what kind of health care coverage you have; you need to understand key insurance terms and practices. This will help you identify the services your plan will pay for and how much you will owe for each visit or medication.
Cost sharing is the concept of individuals and insurance companies sharing medical costs. It has come into favor as a way to keep premiums in check for individuals. It also helps curtail over utilization of services, which keeps costs down for insurance companies.
Cost sharing primarily comes in three forms.
This is a fixed, flat fee for certain kinds of office visits, prescription drugs or other services. Because your copay is fixed, you’ll know ahead of time exactly how much you owe. If your policy lists a copayment of $25 for a doctor visit, you pay that amount each time you see the doctor. In most cases copays do not count as part of the coinsurance or deductible. Copays are fees you’ll pay every time you go to the doctor or pay for a prescription.
A deductible is a set amount that you may be required to pay toward covered medical care within a single year. For example, if you have a $3,000 deductible, you may need to pay that amount out of pocket toward covered medical care before the insurance company will begin paying your claims.
This is a percentage of the total cost for a covered medical service and is usually the amount paid AFTER you have reached your deductible. If the insurance company owes a hospital $1,000 after you’ve met your deductible and you have a coinsurance of 20 percent, you’ll pay $200 for the visit. You may pay it at the time of service or get a bill for your portion after the visit.
Plans with cost sharing are beneficial for both insurance companies and members. The structure lets insurance companies keep costs down. It also keeps premiums lower for members and helps members know upfront what they’ll owe for each service.
If you are looking for the best benefits, with the best rates and the best plan for your group, contact our Sales Support at 888-767-7133.
Founded in 1970, Allied National is one of the nation's oldest and most experienced third-party administrators. We're the small group benefit experts working to provide unique and affordable group health benefits to small business employers.
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Allied National is a 90 Degree Benefits Company, a subsidiary of Blue Cross Blue Shield of Alabama. Founded in 1970, Allied National is one of the nation's oldest and most experienced third-party administrators. We're the small group benefit experts working to provide unique and affordable group health benefits to small business employers.