Sailing the Seas of Insurance Coverage: Deductibles, Copays and Coinsurance, Ho!

by Lauren Sweeney, Office Manager

When last we left our intrepid pirate Sue, she had figured out what it meant for a service to be covered by insurance, and she understood what it meant if a provider was in or out of her network. Being a pirate, however, Sue is concerned about the bottom line. What is all this going to cost?

Like most companies, all of Pirate Health Network's plans have a deductible, an amount that a patient is expected to pay for their healthcare in a calendar year (in addition to the monthly premium). While this amount can vary enormously by plan, higher-deductible plans seem to be an increasing trend. According to a recent CNBC study, the average deductible for a Bronze-level plan on the Exchange is around $5000, and 44% of employers planned to offer high-deductible plans as the only option for employees over the next three years.

Let's say Sue's plan has a $2000 deductible - does that mean she needs to pay $2000 before she gets more than just her in-network discount?

Maybe, but maybe not. Remembers those rules we talked about previously when we discussed covered services? There are three that insurance companies tend to make:

1. Deductible and coinsurance - Sue will have to pay the allowed amount per PHN's contract until she has paid $2000. After that point, her insurance will split the allowed amount with her. She'll have to pay at most half, but usually less (10-20% is pretty standard).
2. Deductible and copay - Again, Sue will have to pay the allowed amount per PHN's contract until she has paid $2000. After that point, however, her insurance will tell her that she only owes, say, $30 each time she comes in.
3. Copay - PHN would say that Sue just owes $30 each visit and doesn't have to meet her deductible first. This is probably the rule that people most often think go when they think of health insurance.

Here's the catch, though - each covered service is usually treated differently. Sue may have a copay for visits to a general practitioner, but have a higher copay to visit a specialist, and may need to meet her deductible before a coinsurance applies for physical therapy services. It's no wonder there can be so much confusion about benefits!

Luckily, Sue's been paying attention. She knows that physical therapy is a covered service, most of the providers in her area are in her network, and she's called Pirate Health Network to find out how physical therapy is covered. Her physical therapy provider has also called to verify her benefits - just like we do at Lakeshore PT - so both she and her provider are on the same page as to what she can expect to pay and what PHN will pay. Because she doesn't have to stress over understanding her coverage, Sue can focus her energy on strengthening her shoulder (and dreaming of the day she can finally get those gills).

Sailing the Seas of Insurance Coverage

by Lauren Sweeney, Office Manager

Since the introduction of the Affordable Care Act, medical insurance has been a hot topic of discussion. Overnight, seemingly, people had to go from having passive knowledge about how insurance works to becoming their own insurance brokers. As our healthcare landscape continues to shift, it's easy to feel out to sea.

So let me introduce you to Sue the Pirate:
Sue is insured through the Pirate Health Network (PHN), and she's got some questions about her plan.

• What services are covered through her insurance?
• Which practitioners are in or out of her network, and what does that mean?
• What can she expect to pay when she seeks out various medical services?

In insurance terms, a service being covered just means that the insurance company has rules in place regarding payment for that service - for example, it may go toward deductible, or the patient may have a copay. Most insurers have rules in place about how they pay for physical therapy, since it's a common evidence-based treatment. If Sue wants to have experimental surgery to have gills installed in her neck so that she can breathe underwater, chances are that her insurance company doesn't have rules about that and she'll be on the hook for the ENTIRE cost.

Okay, so Sue's going to wait on getting those gills, but she is having shoulder pain that she wants to get checked out. She knows that physical therapy is a covered service under her policy, and she knows some providers are in-network with PHN and some are not. Does that make a difference?

Yes and no. If a provider is in-network with a carrier, that means that the carrier has a contract with the provider that helps to manage patient costs. When Sue goes to her doctor to check out her shoulder, her doctor may say that the billed amount of the visit was $100, but if her doctor is in-network with PHN, they may have a rule that states that doctors can only charge $75 for an office visit (this is called the allowed amount). Essentially, Sue is guaranteed a discount for going to an in-network provider.

Just because a provider is out-of-network, however, doesn't mean that a patient shouldn't go there. While it's probable that Sue will pay a little more out of pocket (and some plans have no out-of-network benefits at all, so it's important to know if yours does), out-of-network benefits aren't ALWAYS that different from in-network benefits. Some plans even have a shared in- and out-of-network deductible, which means that the patient only has to meet one deductible for insurance to begin paying expenses.

Oh, that's right - we haven't even gotten to deductibles, coinsurance and copays yet, or what all that might mean for Sue. Don't worry - we'll get to that in our next installment.