When it comes to health insurance, there are alot of terms thrown around. Coinsurance, copays, network, discounts, out of pocket maximum...why can't it just be easy? The "glossary of terms" is not much better. It's like handing someone a calculus book and saying they now know calculus. This weeks post is to help dispell some myths and breakdown costs into something a bit more meaningful.
Let's start broad: Deductible, Coinsurance, Out of Pocket Limits
Plan Assumptions(using round numbers just for simplicity): Deductible $5,000, Coinsurance 80/20, Out of Pocket Max (OOP) $10,000.
Numbers are never fun, but they are important, especially in serious moments. After all, insurance is to help minimize the risks you have.
Assume someone just got diagnosed with cancer. The oncologist prescribes chemo at 3 days a week for 10 weeks. Chemo is pricy. In some cases $10,000 a visit. This diagnosis exposes you to $300,000 of medical debt that your insurance company is positioned to cover because you proactively purchased health insurance.
Chemo Visit 1: Ignoring the initial visit with the oncologist you know that this first visit is going to cost about $10,000. Looking at your plan, the first $5,000 is going to be billed out of pocket to you. Much like a car deductible where you are on the hook for the first $500, or whatever you opted for, this deductible is your responsibility. After your deductible is paid this is where coinsurance kicks in. It's a handshake between you and the insurance company stating you'll cover