Avoiding seeing a doctor because you’re not sure how you’ll pay or what you’ll owe could mean your health suffers and, ultimately, you end up paying more in the long-run when an illness or an infection goes from bad to worse. We’ve done the research for you and outlined below what the most common health insurance payment terms mean so you can better plan to manage your health and your budget.
How Health Insurance Works and the Different Ways You Pay to See a Doctor
Health insurance companies work by taking in more money through premiums (the monthly amount deducted from your paycheck) than they will have to pay out in benefits when you get sick. Essentially, they’re betting you won’t get sick.
An insurance company will pay a portion of your medical expenses when you visit a doctor or hospital or make routine visits for a pre-existing condition (a medical condition you have before insurance coverage begins). The amount the company pays for these visits is called coverage. The amount you pay for each visit is called a copayment (or copay) and can vary depending on what kind of doctor you visit. Alternatively, a policy may not cover any costs until you’ve paid a set amount out of pocket, which is called a deductible. The higher the deductible, the lower the premium (monthly) payments. Some policies have coinsurance, which is a percentage of the health care bill you’re required to pay once you’ve met your deductible.
The lifetime maximum of a policy is the total amount the insurance company will pay out over your lifetime. This is an important factor to consider when deciding between different policies. If you have a pre-existing health condition requiring regular medication and doctor visits, a policy with a lifetime maximum may not be the best choice for you as you could reach that maximum within your life, and then further treatment payments would be entirely out of pocket (i.e. you pay the whole bill).
Some plans will pay a portion of preventive medical expenses, like physicals or immunizations, to help ensure you don’t get sick. And some employers offer wellness programs to keep employees healthy and thus lower medical costs. Participation in these programs may qualify employees for reduced premiums.
A Health Insurance Plan Is Worth It
Although the various payment structures may seem complex and expensive, paying strictly out of pocket for a single hospital stay could wipe out your savings or checking account—or both—and more. That’s not a gamble many people are willing to take. If you can’t afford higher monthly premiums, choose a plan that has a low premium and high deductible. You’ll pay more when you go to see the doctor or visit urgent care, but there will be a limit—the deductible amount—so if a worst-case-scenario happens, you won’t have to pay the tens or hundreds of thousands of dollars a hospital stay can cost.
If you have health insurance with a high deductible—and even if you haven’t met that deductible yet—a healthcare provider may charge you less than if you weren’t insured. Essentially, they would charge you the negotiated lower rate they would charge the insurance company, even though you’re paying the entire bill.
Prior Authorization—Make Sure You Get It
Sometimes, even if you call ahead and confirm with someone at the reception desk, you’ll see on your bill for a non-emergency doctor visit that you’ve been charged for a non-in-network visit. Unfortunately, if you signed a release form before the doctor’s visit, you can’t hold the healthcare provider responsible for the mix-up.
To avoid this costly mistake, ask the doctor’s office for prior authorization, a written confirmation from the insurance company that they are indeed in network. It can save you the world of hurt of trying to pay for a medical bill you weren’t expecting.
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