New Year…..New Insurance Deductible
It’s that time of the year again when many of us have our health insurance renew. Many companies have been forced to shift much of the costs onto the employee or stop offering insurance as a benefit altogether.
This ultimately means that many employees are paying huge amounts of money for health insurance even with insurance coverage. High deductibles, co-payments and co insurances have shifted the costs back on the consumer and while many have insurance, it’s still too expensive to use.
What do we mean? Here are a few insurance terms that you should be very aware of and how they directly affect you and your family.
Premiums. Premiums are simply the monthly bill you receive from your insurance carrier. Sometimes this may be partially or wholly paid by an employer where money may be deducted by your employer as a cost sharing agreement.
Co-pays are flat fees that consumers must pay when receiving a medical service. These are fixed amounts and specified for things like emergency room visits, primary care physician visits, physical therapy visits etc.
- Your co-pay is the amount you pay for each of these services and have gone as high as $50 – $100 per visit
Deductibles refer to an out-of-pocket expense ceiling that you must meet before portions of your insurance plan begins to pay. Deductibles apply to a given benefit period, usually of one year at a time. There is great concern about high deductibles as many consumers chose a higher deductible to decrease their monthly premium expense.
- For instance, it is not uncommon to have plans with $3000, $5000 or $10,000 deductibles.
Coinsurance stipulates that the insured pay a certain percentage of the total cost for services; this feature commonly kicks in after deductibles are met.
- Many coinsurance plans involve an 80/20 split in which you assume 20% of costs and your insurance plan covers the remaining 80%.
Flexible Spending Accounts, or FSAs, are pre-tax deductions from your wages that can be applied toward health care in a given benefit period. These accounts can be used for co-pays, coinsurance bills, over-the-counter products and other out-of-pocket spending. As of 2017, FSA contributions are capped at $2,600 per plan year. These plans can be funded on a pre-tax basis by employers or employees, or both. Please note, however, that the $2,600 limit applies to employee salary deferrals only.
It is now very important for you to become a savvy healthcare consumer. If you have a plan with a high deductible where you will be responsible for the first $3000 of expenses, you need to be aware of how much visits and procedures cost. Many healthcare providers offer “self pay” discounts where the fees are sometimes cheaper than the insurance fee.
Concerned that your doctor is not in your insurance network? With high deductible plans it really does not matter since you will be responsible for the costs anyway. This allows you to “shop” for the best provider to fit YOUR needs, not the needs of your insurance company.
This puts you in the driver’s seat as a consumer and you should expect a high level of service and satisfaction for your hard earned money.
We know health insurance costs are increasing dramatically, so arm yourself with this information, ask your healthcare provider about the cost of services and call your health insurance company. Then, you will be able to navigate these changes in a way that’s best for you.