We understand that insurance plans and payment for healthcare services could not be more confusing. To understand insurance, it feels like you have to learn an entirely new language. Not to mention, most healthcare bills are entirely unpredictable. We would like to remind you it is your responsibility to understand your insurance plan, but we will also try to help along the way. Here are some terms you should know:
Premium: This is the amount you pay for health insurance each month.
Deductible: This is the total amount you pay for health care services before your insurance plan starts to pay.
Co-pay: This is the fixed amount you pay out of pocket for covered services. Your co-payment for physical therapy it is usually associated with a "specialist office visit" and your insurance plan may also require you to pay co-insurance in addition to your co-payment. Be aware that co-payments typically do not count towards your deductible, but they do usually count towards your out of pocket maximum.
Co-insurance: This is the percentage amount of a covered service you pay, separate from any co-payment or deductible from your insurance plan. It is common for insurance plans to require you pay 20% and they pay 80% of the allowed medical expense. This is usually something you need to pay in addition to any co-payment or deductible payments.
Out of pocket maximum: The maximum amount you pay toward your covered services in a year. This usually includes deductibles, co-payments, and co-insurance, but does not include your premiums.
Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA): These are ways to save on qualified medical costs by using pre-tax money. If you leave your job, funds in your FSA may be forfeited, while any funds in an HSA are yours to keep. Sometimes these funds expire at the end of the year, so don't let it go to waste!
In-Network Provider: The term "in-network" refers to health care providers who are a part of your insurance plan’s network of providers. Usually, your insurance plan has negotiated a discount with these providers. This means providers who are in-network provide services at a lower cost to your insurance company. While this is very effective at controlling the cost of care, it can come with consequences to the patient such as shorter appointment times and your doctor managing a higher patient volume.
Out-of-network Provider: The term "out-of-network" refers to health care providers who do not participate in your insurance company's rules and regulations. This does not mean these providers are not covered by insurance. Most insurance companies provide you with out-of-network benefits which allows you to see providers in and/or out of your plan, but the provider is not bound by the insurance company’s rules and regulations.