When it comes to understanding the confusing and often unclear fees that are built in to most healthcare plans, it’s best to start with the basics.
If you find yourself a little overwhelmed when it comes to health insurance’s logistical lingo, don’t worry — you’re not alone. A 2013 study published in the journal Health Affairs concluded that over 60% of people navigating the healthcare exchange have difficulty understanding its crucial components.
Figuring out which services are covered by your provider versus what you’ll have to pay for out-of-pocket can be a challenge, which makes it difficult to match your healthcare needs with what you can realistically afford.
Copay and Deductibles: Tackling Some Basics
Let’s address two of the most important health insurance concepts: copays and deductibles. Just take a deep breath — this will only hurt for a second.
The first thing you need to understand is that both terms involve some form of cost-sharing, meaning that you’ll have to pay for part of your care, and your insurance company will cover the rest.
In the most basic sense, a copay is your portion of the overall fee for a specific instance of care. It’s usually pretty manageable and often directly spelled out on the back of your insurance card — maybe $20 for a doctor’s visit or $10 for a prescription refill. Your fee will always remain the same for each service, each time you receive it.
A deductible, on the other hand, is the amount of money that you have to pay out-of-pocket each year before your insurance company will kick-in any financial assistance whatsoever. Once the deductible is met, your insurance company should start covering all of your expenses, but you may find yourself still on the hook for sneaky, built-in costs related to coinsurance and coverage gaps.
While meeting your deductible theoretically means your insurance will now be covering the bulk of your medical expenses, copays operate independently and are ongoing. As the Huffington Post explains, the only way you can get out of the copay cycle is by reaching your plan’s out-of-pocket maximum.
The Tricky Part
While a cost of copay for a specific type of care will always remain fixed, U.S. News points out that copay percentages can vary widely from service to service. It’s true that many copays are relatively affordable, but certain services come with a higher price tag, and it’s not always clear beforehand.
The copay for a routine physical might only be $10 to $20, but the copay for a visit to the emergency room can cost hundreds.
Depending on the plan, your coinsurance can change a lot. Even if you’ve met your deductible, you’ll still be responsible for some percentage of the overall bill until you meet your out-of-pocket maximum. It’s crucial to understand what your coinsurance rate actually is in order to avoid unexpected, debilitating costs, especially after you think you’re in the clear.
Sidestep Extra Fees
For many people, all of these extra expenses can be unsustainable, especially in combination with a high monthly premium. Luckily, there are other options that you can turn to.
SingleCare offers an extensive database of qualified healthcare providers at pre-negotiated reduced rates, allowing many Americans to pay for services and medications that might not be covered as part of their existing plans. With SingleCare, there are no deductibles, copays, or hidden fees of any kind; what you see is always what you get.
(Main image credit: National Library of Medicine/flickr)