Premium, deductible, copay, out of pocket maximum, there are a lot of terms to know when it comes to health insurance and it can all be confusing for most of us.
For the month of September 9Health has partnered with Connect for Health Colorado to cover all things health insurance so you’re prepared when open enrollment comes along in November. We talked with them on Health Happens, our weekly Facebook Live show. Click here to watch the full episode.
First, to define the terms we just mentioned:
Premium – Think of this as your monthly bill – the amount you must pay the health insurance company, on-time each month or you may lose coverage. You pay this even if you don’t use healthcare services that month. If you choose a plan with a lower premium, expect to pay more for prescriptions and healthcare services.
Deductible – Generally, the amount you have to spend on covered healthcare services and prescriptions out of pocket before your health insurance company starts to pay a percentage of your bills (coinsurance phase). Health plans can vary on what they count towards the deductible. Plans with lower premiums tend to have higher deductibles. All plans must provide many preventive services and screenings at no charge to you BEFORE you met the deductible. Plans may also offer other services with a copayment that do not apply to the deductible.
Copayment (or Copay) – A fixed amount ($10, for example) you owe for a prescription or medical visit that is covered under your health plan, usually paid when you receive the service. For most plans, the copay phase of cost-sharing starts right away; the exception is Health Savings Account (HSA) plans for which you have to meet the deductible first. Copays do NOT count towards your deductible amount, but they DO count towards your out-of-pocket maximum.
Out-of-Pocket Maximum – The most you’d ever have to pay for covered services and prescriptions in a plan year. After you spend this amount on deductibles, copays and coinsurance, your health insurance company pays 100% of the costs of covered benefits for the rest of the year. Your monthly premium or anything you spend for services your plan doesn’t cover (out-of-network) do not count toward this limit. This limit resets each year.
It’s important to have health insurance because it helps pay for your health care when you need it most and protects you from financial debt. Connect for Health Colorado helps by providing resources so you’re able to pick the right insurance for your needs.
One of the resources they have is a list of things you need to know about health insurance to help you understand some of the key elements of choosing an insurance plan:
Helps keep you healthy
All plans cover many preventive care services before you get sick (even if you haven’t met your deductible) – check-ups, vaccinations, screenings for breast cancer, cholesterol and diabetes, and more – at no additional cost to you.
Protects you from debt
No one plans to get sick or hurt, but most people need medical care at some point. It’s hard to predict when and what type of care you will need, let alone how much it will cost. Fortunately, health insurance is designed to greatly reduce the burden of the costs when you receive care. Did you know the average cost of a 3-day hospital stay without health insurance is $30,000? Or that treating a broken leg can cost up to $7,500? Having health insurance can help protect you from high, unexpected costs like these.
Helps you pay for care
Health insurance is designed to share costs with you. You may have to pay coinsurance or a copay as your share of the cost when you get a medical service, like a doctor’s visit, hospital outpatient visit, or a prescription. And you may have to pay a deductible each plan year before your insurance company starts to pay for the care you get. For example, let’s say you have a $2,500 deductible. You go to the emergency room and the total cost is $3,500. You pay the first $2,500 to cover the deductible, and then your insurance starts to pay its share. Once you’ve spent the out-of-pocket maximum, your insurance will pay 100% of your covered healthcare costs.
There are many kinds of plans
While all health insurance plans are required by federal law to include the essential health benefits, your plan options still vary significantly in the type of plan, size of their provider network, how they share costs with you and the benefits they provide (outside of those required by law).
You can easily compare plans based on what matters to you most using our Quick Cost & Plan Finder tool. While you are there, take the time to read the Summary of Benefits and Coverage (SBC) for each plan you are considering to understand how they share costs with you and to make sure the medical services you and your family use are covered.
Staying in your plan network will save you money
Health insurance plans contract with networks of hospitals, doctors, pharmacies, and health care providers to take care of people in the plan. Most plans will only pay when you get care from a provider in the plan’s network. If you go out-of-network, you will likely have to pay the full bill.
Be aware of insurance-like products
Outside of the Connect for Health Colorado Marketplace, you may see products that look and sound like health insurance, but don’t give you the same protection as full health insurance. Some examples are policies that only cover certain diseases, policies that only cover you if you’re hurt in an accident, or plans that offer you discounts on health services. There are also short-term plans that only last for six months. Rest assured that ALL plans sold through Connect for Health Colorado offer all of the benefits and protections of a Qualified Health Plan, including coverage for pre-existing conditions. Here’s a handy chart that will help you evaluate a plan.
In the resources section of their website, Connect for Health Colorado also resources for picking the right insurance plan and getting financial aid to help pay for insurance. They also offer a state-wide network of certified experts to help you complete your application.
The open enrollment period this year begins on November 1st for coverage starting January 1, 2020. Open enrollment is the period of time when you can sign up for, or make changes to, a health insurance plan. There is one open enrollment period every year. You must have a life change event, such as losing Medicaid or insurance from your job, that would qualify you for a special enrollment period.
When people shop through Connect for Health, they can apply for financial assistance to lower their premiums and compare plans from various health insurance companies in their area. All the plans they sell provide essential benefits and protection, and they have a statewide network of help with the process.
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