The complexities of insurance Deductibles, Copays, Coinsurance, Referrals, In network, Out of network
Just about all health insurance plans utilize what is called cost sharing, where consumers pay a portion of the cost of their health care services. The amount and type of cost sharing is variable across insurance providers and plans. Cost sharing can be broken down into three separate categories that all serve a different purpose and work in different ways. Deductibles, copays, and coinsurance are the specific types of patient out of pocket cost sharing responsibilities. In addition, there are other parts of your medical insurance agreement that can get complicated as well such as referrals, in network providers, and out of network providers. In order to understand the complexities of these obligations, you must first have a good understanding of what they are.
Your insurance deductible is the portion you must pay before the benefits of your health care insurance policy will kick in for the for the year. Your insurance annual deductible is your share of cost, meaning you are responsible for that monetary value of medical services received every year before your insurance will pay out on a claim (or service). Typically a lower annual deductible is paired with higher premiums while a higher annual deductible is paired with lower premiums. You have the option to choose what suits you best when you are browsing different insurance plans.
Your copay for your medical appointments is anther part of your share of cost of your healthcare services. Your copays will be different (most of the time) for each type of doctors visit based on a percentage of the average costs of said doctors visit type. For example, you will have a separate copay for emergency department visits, urgent care visits, primary care visits, mental health visits, and specialist visits. There are also copays for when you get your prescription medications, although a good handful of plans keep these copays relatively low or free for some prescription medications.
Your coinsurance is another share of cost that you will be responsible for if it is specified in your health insurance agreement contract. Instead of specifying a dollar amount like a copayment does, with coinsurance there will be a percentage amount that will be your responsibility. This means when you get your bill for which ever medical service you have coinsurance on, you are responsible for the percentage of that dollar amount that is specified in your health insurance contract.
Most medical insurance policies require a sort of pre approval that you have to get from your primary care doctor in order to see a more specialized doctor within your insurance network. Without a referral, either the specialist will not see you at all or your insurance will drop the entire specialist bill on you. Without a referral, either the specialist will not see you at all or your insurance will drop the entire specialist visit bill on you. This policy within the contract ensures that your insurance provider is not paying for frivolous specialist doctors visits that will cost them excessive amounts of money. Some insurance plan types will not require a referral, and in that case you are free to see a specialist as long as the specialist themselves don’t require a referral to see you.
In network Providers
Healthcare providers are practices, facilities, and physicians that are contracted with your health insurance provider. These entities typically contract with each other to drive business needs on both sides, where the physician gains patients and provides services for a pre agreed upon discounted rate from the insurance provider. Not only do in network visits benefit both the insurance provider and the healthcare service provider, but they also benefit you because you save money as well. Your insurance provider usually gives you resources to locate providers who are in their network so that you can narrow down your selection.
Out of Network Providers
A doctor, practice, or facility that has not agreed under a contract on discounted rates is considered to be out of network. A good amount of health insurance plan types don’t pay for any out of network provider visits, while others do offer some coverage of out of network visits. The insurance plans that do cover out of network doctors visits will help with the cost of said of out of network visit but not nearly as much as they would be if you were using a doctor, practice, or facility that is in network.
Paying Your Cost Share is Not Optional
Some patients feel that they should not have to pay their shared cost of health care services and end up not paying them. There are several reasons why this can cause chaos and problems for the patient, doctor, and insurance provider. When you purchase insurance you are signing a legally binding contract where you agree to specifically outlined financial obligations. No one is attempting to scam or conceal what you are and are not responsible for paying when it comes to your healthcare services; it is all written out in your legally binding agreement.
Much like patients are signing a legally binding agreement when purchasing health insurance, the doctors that provide services also sign a legally binding contract that they also agree to collect the cost share from patients. If the doctor does not follow and uphold the obligations of said agreement with an insurance provider, they can lose their spot as a participating provider. In addition, when a doctor fails to collect copays they are actually breaking the law and committing fraud. It is illegal to provide an incentive of the financial sort to influence the choice of patients in what doctor they decide to seek medical services from. Just like breaking the law in any other way, the consequences of committing fraud include revoked license to practice, jail time, and hefty fines.
The purpose of health insurance is to assist in the financial burden of healthcare services, not to cover them entirely. Without health insurance it is almost impossible for a median income family to afford to pay for medical service costs, but even with the help of medical insurance, the cost of healthcare is enough to put a financial strain on anyone. The point to drive home is that you have the freedom to choose from the different options in healthcare plans and coverage (even if that’s not a whole lot), and you should only sign up for the one that you can afford to pay your cost share on. If you don’t like the deductible, copays, and co insurance rates of a plan, just don’t sign up for it. By failing to meet financial responsibilities you have agreed to under a medical insurance contract, you are heavily contributing to the price inflation of medical services which will never change if everyone, including you, does not do their part.
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