Do you understand your health insurance policy? Many Americans have gaps in understanding that end up costing them big. Things slip through the cracks that can add up to thousands paid out-of-pocket.
But with a thorough understanding of health insurance terminologies and coverages, and proactive steps to choose and manage your policy wisely, you can save bundles. This guide breaks down key terms to know, hidden cost trips people fall for, and tips empowering you to avoid them.
Decoding Those Pesky Health Insurance Terms
First things first, do terms like “premium”, “deductible”, “co-pay” or “co-insurance” make your eyes glaze over? You’re not alone. But a grasp on these basic healthcare plan vocab words serves as a prerequisite to properly assessing policy options and controlling spending.
Premiums
Regular, recurring payments (usually monthly) are made to have active health insurance. It goes towards covering overall medical care operations. Generally, premiums must be paid whether or not medical services were accessed that month.
Deductibles
An annual threshold amount an insured person must pay towards covered medical services before insurance kicks in contributions.
Co-Pays and Co-Insurance
This refers to the specific percentage or fixed dollar amount you owe per doctor visit, prescription fill, hospital stay, etc after hitting the annual deductible. Your insurance company then pays the remainder owed.
In-Network vs Out-of-Network
In-network providers are your insurance company that has pre-negotiated rates to make care more affordable. Seeing out-of-network providers typically costs the insured much more out-of-pocket.
Say what? No need for eyes to further glaze or brains to cramp. Let’s see how a lack of clarity on some key healthcare insurance unknowns sets people up for budget-busting surprises.
Healthcare Insurance Hidden Budget Busters
Juggling family priorities, careers, relationships, and finances occupies most of our bandwidth. Thus few relish leisurely poring over healthcare documents filled with legal jargon and tedious tables. Unclear policy points get inadvertently overlooked.
However obscure terms or coverage holes can lead to bad budget surprises when medical needs arise. Top budget-busters through health insurance unknowns include:
Using Out-of-Network Providers
Seeing doctors or using hospitals not contracted with your insurance generally means much higher out-of-pocket costs. Some plans cover only 50%-60% of costs when going out-of-network, leaving the insured with huge bills vs. seeing in-network providers.
Uncovered Services
Many assume common medical services are included only to find glaring exceptions. For example, vision and dental care are often completely excluded or barely covered. No dental insurance could mean a $1500 tooth crown comes mostly out of your pocket.
Yearly Out-of-Pocket Maximums
Caps limit the total individuals pay per year…when using in-network providers. But see out-of-network physicians and additional expenses may continue piling up unlimited.
Prescription Drug Coverage
Don’t assume your favorite medication made it off the insurance company’s chopping block when they rejiggered covered meds for the new year. Check plan details clearly for continued Rx coverage.
See how gaps in understanding insurance coverages or confusing terms can cost you. Now what can you do before selecting plans or when using your health insurance to avoid budget-busting surprises?
Tips for Using Health Insurance Without Breaking the Bank
Forewarned is forearmed! Heed the following tips to keep medical expenses reined in:
Analyze Plan Details
Carefully examine out-of-pocket costs, deductibles, coverages, and payment percentages before signing up. Read the fine print annually at open enrollment to detect alterations.
Stay In-Network
Verify all your providers are contracted with the plan to minimize large bills. Search for in-network options before tests, physician referrals or hospitalizations.
Dispute Errors
With medical billers processing insurance claims, inaccuracies happen! Review medical bills confirming services align to explanations of benefits before paying.
Plan for Out-of-Pocket Costs
Estimate annual medical expenditures towards deductibles and co-pays building this amount into your household budget. Also, determine if a Flexible Spending Account helps cover costs pre-tax.
Conclusion
Changing marketplaces and technologies keep impacting health insurance options and regulations. Stay continually informed to ensure your family’s protection. Avoid surprise medical costs threatening household budgets or savings through proactive health insurance management.
