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Understanding Health Plans

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Understanding Health Plans
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Knowledge is Power

Having access to affordable care and a safety net in case something happens with your help is important. But with how confusing the system can be, it might make you feel more stressed than covered.

Feel prepared to pick the right health plan and then use it by educating yourself through this page. 

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Key Health Insurance Terms

Your premium is what you pay each month to have an active insurance plan. For example: Consider this like the monthly fee you might pay for a streaming video service. Each month you pay a fee to access all the movies and TV shows provided by the platform. Even if you only watch one or two shows a month, you will still pay the same monthly fee for access. 

A few things to know about premiums:

  • If you buy your plan through, you may be eligible for a tax credit toward your monthly premium cost. 
  • If you get health insurance through your job, then your employer usually pays a share of your monthly premium.

Your copay is a fixed amount that you pay for a covered health service. So if you want to go to your provider, you’ll pay what’s listed in your plan under the copay for that type of health care service.

A deductible is what you will pay every year for health care services before your insurance company starts paying for your care. Generally, plans with high deductibles have lower monthly premiums.  

For example: If you have a deductible of $2,000, your insurance plan might not start covering costs until you’ve paid $2,000 towards your health care for the year. Some plans may cover the cost of some services, like an annual check-up before you’ve paid your total deductible amount.

After you’ve reached your deductible for the year, there may still be a percentage you’ll pay toward your medical expenses. For example: If you might meet your $2,000 deductible in July, for the rest of the year, your coinsurance would be 20%. This means that you would pay $20 of a future $100 bill, and your insurance company would pay the other $80. 

This is the limit to what you will pay out-of-pocket for covered health services. It includes your deductible, copays and coinsurance. Once you’ve paid this maximum amount, your health insurance plan will pay for 100% of the rest of your covered care for the plan year.

Not included in your maximum out-of-pocket:

  • Monthly premiums
  • Balance bill charges
  • If your plan spells out the difference between in-network and out-of-network providers, those out-of-network bills may not count
  • Extra services like medical devices

Helpful tips for choosing the right plan for you:

No one can predict the total care they’ll need in the future. Think about your current health care needs. When do you see your provider? How often?

Compare the following with each plan you look at. Scroll back up to understand each of the terms here.

  • Your copays. The amount can vary by the type of covered service. What kinds of services do you think you’ll need, and how often?
  • Your yearly deductible. When shopping for plans, it’s important to know what your plan covers and what services will count towards your deductible.
  • Your co-insurance. Not all plans have coinsurance, so make sure to clarify if the plan you’re looking at does. 
  • Your maximum out-of-pocket. How much is your maximum? Is that something you can afford every year if you need to?

Calculating your costs:

When you’re shopping plans, it’s important to think about all your costs for the year, not just the monthly premiums.
Yearly Premiums + Maximum Out-of-Pocket = Estimated Yearly Cost

To calculate this:

  • Your monthly premium payment x 12 (remember to remove any premium tax credits you qualify for).
  • Your maximum out-of-pocket (MOOP): Calculate your MOOP based on if you’re single or a family.

Ask yourself these questions:

  • Does this plan cover the providers I want to see? Am I ok with switching providers?
  • Does this plan cover the medications I take?