Understanding health insurance can feel confusing. This guide simplifies key terms like deductibles, copays, and coinsurance so you can better understand your healthcare costs.
Knowing Your Deductible Matters
Understanding your insurance plan is very important to avoid being caught off-guard. Before you reach your annual deductible, healthcare costs, including appointments, can be higher. After your out-of-pocket spend meets or exceeds the amount of your deductible, your insurance will generally cover more, reducing your out-of-pocket costs.
What is a Deductible?
A deductible is the amount you have to pay out of pocket each year before your insurance starts helping more with your medical costs.
How It Works
You pay for medical services yourself until you hit your deductible.
After that, your insurance starts covering a bigger portion of your care.
Example: If your deductible is $2,000, you pay the first $2,000 of covered medical costs. After that, your insurance may start covering 70–100%.
Helpful Tips:
Your insurance company sets your deductible amount.
Not all services count towards your deductible.
Circle Medical doesn’t determine coverage; your insurance provider does.
What is a Copay?
A copay (or copayment) is a fixed amount you pay for certain healthcare services, like a doctor's visit or a prescription. You typically pay this amount at the time of service, regardless of whether you've met your deductible.
How it Works
Your copay is a specific fee, such as $20 per office visit or $10 per prescription refill.
Helpful Tips:
Copays usually don't count towards your deductible.
Copay amounts can vary based on the type of service and your insurance plan.
What is Coinsurance?
Coinsurance is the percentage of the cost you pay for covered healthcare services after you've met your deductible. Your insurance pays the remaining percentage.
How it Works
If your plan has an 80/20 coinsurance, after you meet your deductible, your insurance pays 80% of the covered costs, and you pay the remaining 20%.
Helpful Tips:
Coinsurance is usually expressed as a ratio (e.g., 90/10, 70/30).
Your coinsurance obligation continues until you reach your plan's out-of-pocket maximum.
Learning More About Your Costs
To get a clear picture of your potential out-of-pocket expenses:
Review Your Summary of Benefits: This document from your insurer outlines your deductible, copays, coinsurance, and out-of-pocket maximums.
Check Your Explanation of Benefits (EOBs): After receiving care, your EOB details the costs, what your insurance covered, and what you owe. It also shows how much you've contributed to your deductible. {Link the EOB article}
Contact Your Insurance Provider: Call the member services number on your insurance card to ask specific questions about your plan's costs for different services.
Use Your Insurer's App or Website: Many insurers provide online tools to track your deductible progress and view claims information.
Understanding these key insurance terms will empower you to better anticipate and manage your healthcare costs.