You don’t want to pick a health care insurance plan blindly. That’s like going speed-dating blindfolded and taking home the person with the best voice.  The best sounding plan (or date) might not be the right choice for your requirements.  You have to make the best effort to understand the various plans your employer has laid out for you in addition to what each policy actually states.  You know, reading the fine print!  Out-of-pocket costs can build up, so paying attention to what your co-payment, deductible and co-insurance is a BIG deal.  However, outside of cost, you also have to think about coverage, access to doctors, and in-network vs. out-of-network.

The cost of medical care can soar into great cashola heights, but seeking medical care is still essential.  You may be healthy today, but you can’t bet on tomorrow.  So, take advantage of health care insurance benefits offered to you by your employer—but know what you’re getting yourself into.

Terminology Takedown:

• Health Care Provider: Anyone or anything involved in health care. This can include hospitals, doctors, and specialists like Orthopedists (bone doctors).
• Insured Patient: A patient (you) that is covered under a health plan.
• Premium: The amount of money you pay (or someone else pays for you) each month (or year) to purchase and stay on a health plan.
• Contracted Rate: An agreement between a health care provider and the health insurance company on how much a service will cost.
• In-Network Provider: A health care provider that has a contract with a health plan. If you use the services of an in-network provider, you will get the discounts that the health care provider and health insurance company agreed on.
• Out-of-Network Provider: A health care provider that does NOT have a contract with a health plan. You will charged the full cost for treatment to the out-of-network provider UNLESS the health plan provides some benefits when using an out-of-network provider (in which case there will be an amount paid for by the insurance).
• Out-of-Pocket: The amount of money you will pay for treatment that the health plan does not pay. The premium is not included as out-of-pocket.
• Co-payment: The amount that you MUST pay out-of-pocket to visit or use a service from a health care provider. For example, you might pay a $45 co-payment for a doctor’s visit, or to obtain a prescription. A co-payment must be paid each time you use a service. The co-payment is not included as a component of the deductible unless the health plan says otherwise.
• Deductible: The amount that you must pay out-of-pocket for treatment before the health plan “kicks in.” For example, you might have to pay a $500 deductible per year before any of your health care is covered by the health plan. It may take several doctor’s visits or medicine refills before you reach the deductible and the insurance company starts to pay for care. Sometimes a health plan does not include a deductible.
• Co-insurance: If the co-payment has been paid, and you have also paid the deductible for the year, then the co-insurance is a percentage of the total cost that you must also pay when the health plan starts paying for treatment. For example, you might have to pay 20% of the cost of a surgery along with a co-payment, while the insurance company pays the other 80%. Some plans don’t include a co-insurance.
• Out-of-pocket maximum: If you have paid out-of-pocket to a certain amount, the health plan will pay for the rest of treatment. Out-of-pocket maximums can apply to a specific category (such as prescription drugs) or can apply to all coverage provided during a specific benefit year. Co-payment may or may not be included in out-of-pocket maximum.