Welcome to Health Insurance 101
What is the difference between my deductible and my out-of-pocket-maximum?
The deductible is the amount you must pay for certain services before the insurance plan will help share the cost. Your out-of-pocket-maximum is your 'all-in' number. It is an aggregate of all your cost-sharing for covered services. That includes any amount you pay toward the deductible, coinsurance and copays, for covered services.
Do I save money if I don't use an agent?
The short answer is no. If an insurance carrier partners with insurance agents, they have already built the cost of agent commissions into the premium whether you use an agent or not. Insurance rates are filed with your state's insurance division each year, and they don't change after they are approved, agent or no agent. If you don't work with an agent, the insurance company simply gets to keep a little more money. Commission amounts vary, and can be a flat dollar amount paid per person enrolled on the plan, or a percentage of the policy premium. In the ACA market, commissions are typically a flat dollar amount per person enrolled, often denoted as Per Member Per Month or PMPM, so an agent doesn't get paid more for enrolling you in a higher premium plan. If converted to a percentage, that flat dollar amount usually comes out to 1%-4% of the premium.
What is the difference between a copay and coinsurance?
A copay is a flat dollar amount that you pay for things like office visits. If you have a copay for a service, that is usually in place of you having to meet the deductible first. Coinsurance is a percentage you pay, typically after you've met your deductible for the year. It might read something like, "30% after deductible". Think larger expenses like ER visits, hospital stays, MRIs and CT scans, although it's become more common in recent years for smaller services like labs or x-rays to also be subject to the deductible. Just remember, a copay is flat dollar amount, coinsurance is a percentage of the charge.
Why don't my copays count toward my deductible?
The whole idea of a deductible is that it's 'deducted' from your coverage, and you must pay that amount before insurance kicks in. So, if you have a copay for a particular service, that means the insurance company is also paying some amount for your care. for what it's worth, it's usually more than you pay. In these instances the insurance company will share the cost before you meet your deductible. Since they will share the cost before you meet the deductible, the amount you pay does not get to count toward the deductible. For example, let's say your insurance company's allowable rate (aka, contracted rate) for a Primary Care Provider office visit is $135. Your copay might be $35 which means your insurance pays $100 for the visit. In order for charges to count toward you deductible, you would have to pay the entire charge. Once you understand this difference between copays, and charges subject to the deductible, it makes it easier to stomach. Don't forget, even though copays don't count toward your deductible, they DO count toward your out-of-pocket-maximum, so you got that goin' for you, which is nice.
Where can I find updates?
Stay informed by checking our blog and video library for the latest updates. You can also subscribe to receive email alerts when we publish new material.