My Patient Rights can help guide you in resolving issues so you can get the health care you deserve.
We know first-hand how confusing health insurance can be.
Deductible, co-pay, coinsurance, out-of-network, premium. Although these terms are listed in your health insurance plan’s coverage benefits, and we’ve included a glossary in our “Choose Smart” checklist, what do they really mean when thinking about your access to needed medications?
Not understanding the ins and outs of our health plan can be costly. Millions of Americans receive surprise medical bills each year, even those with insurance according to research by the Peterson-KFF Health System Tracker. A new federal law, The No Surprises Act, went into effect Jan. 1, 2022, banning most unexpected medical charges, but not all of them.
Becoming an expert in these types of terms, and your coverage benefits in general, will help you determine what is considered in or out-of-network, learn how to read and comprehend medical bills, and how to better advocate for yourself. Stay with us while we break down some common health insurance jargon to help you become more insurance-literate.
What is Health Insurance Literacy?
Health insurance literacy is the degree to which individuals have the knowledge, ability, and confidence to find and evaluate information about health plans, select the best plan for themselves, and how best to use the plan once enrolled.
To help with this, first let’s identify some key terms.
A deductible is how much you pay for a medical service before insurance covers the rest. Deductibles can range from a few hundred to thousands of dollars. So, if your deductible is $500, you will pay out of pocket for any services/medications you need until you reach $500. After that, your insurance will generally only require you to pay your coinsurance until you reach out out-of-pocket maximum. Once this cap is met, your insurer pays 100% of covered services. Ask what your out-of-pocket costs will be before you consent to any tests, treatments, etc.
A premium is your monthly payment. Insurance plans are a balancing act between deductibles and premiums. Generally, the higher a plan’s deductible, the lower the premium. When you’re willing to pay more up front when you need care (high deductible), you save on what you pay each month. Higher deductible plans make the most sense for people who are relatively healthy and do not have dependents; whereas lower deductible plans make more sense for people who expect a considerable amount of medical care (i.e. those with chronic conditions who need to see several specialists, regularly.)
Copayments (copays) and coinsurance are two types of cost-sharing measures built into your health insurance coverage plan. For both copayments and coinsurance, it is important to note that they could be different, and much higher, with an out-of-network provider.
A co-pay (or copayment) is a fixed cost that you pay on the spot each time you go to your doctor or fill a prescription. Your co-pay amount is printed right on your health plan ID card. Your co-pay can vary depending on what services you are accessing, for example your mental health services co-pay can be a different amount than your medical health services co-pay. Review your coverage benefits or ask your health insurer if you are unsure.
Coinsurance is what you have to pay for health services once you’ve met your deductible. Unlike your copayment which is a fixed fee, your coinsurance is the percentage of the treatment cost that you are expected to cover until your deductible resets. Plans with lower coinsurance make your insurer pay more of the costs, but they often have higher premiums.
In-network and out-of-network are what is and is not covered by your plan. When a doctor, hospital, or other provider accepts your insurance, they are in-network. When you go to a doctor or provider who does not accept your insurance, they are considered out-of-network. When out-of-network, the patient is typically on the hook for the full cost of the care received. Misunderstandings in this area can usually lead to large surprise medical bills (i.e., you weren’t aware the doctor at your hospital’s emergency room isn’t accepted by your insurance even though the hospital is considered in-network). Many companies have “Find a Doctor” features which list health care professionals within your insurer’s network. You can also call your insurer’s member services line to speak with a representative if you’re unsure whether a new provider, specialist, or hospital is in-network.
How Do I Get This Information?
The best way to understand and know how these terms impact your healthcare coverage is to ASK. Your insurance provider is there to answer your questions, comments, and concerns. Don’t understand a term on your bill? Call and ask. Don’t understand how something is adding up? Ask for an itemized bill and go over it with your provider. If things don’t add up, you can file a formal appeal with your insurance provider. Information about how to appeal should be on the Explanation of Benefits (EOB) you receive from the insurance company, or you can use our website’s “Get Help” tool.
You can also ask your doctor if you have questions about how much a potential medical procedure, such as a blood draw, will cost and how it will be coded for billing purposes. If you are unsure and your doctor is unaware of the cost at the time, you can always say “no” to any non-emergent service(s) and follow up once you find out more information. Yes, the doctor is there to provide their professional opinion, but do not feel pressured
to receive a test if you are unsure of the cost or if it’s considered in-network – it could end up being $2,000 out of your pocket.
There are no “stupid” questions, and there are no “bad” questions. It is your responsibility to safeguard your health and be your own best advocate. My Patient Rights is always here to help.
This My Patient Rights blog post is provided for educational and informational purposes only and does not constitute providing medical advice or professional services. The information provided should not be used for diagnosing or treating a health problem or disease, and those seeking personal medical advice should consult with a licensed physician. Always seek the advice of your doctor or other qualified health provider regarding a medical condition. If you think you may have a medical emergency, call 911 or go to the nearest emergency room immediately.
My Patient Rights can help guide you in resolving issues so you can get the health care you deserve.
Find answers to commonly asked questions.
State and federal law protects your rights. When you sign up for a health plan and/or if you have problems accessing care through your health plan, it is important to know your rights.