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Understanding Your Out of Pocket Expenses 101

There’s no doubt that the world of health insurance is challenging. Whether you’re researching new coverage or trying to understand your current coverage, you may feel overwhelmed with the laundry list of options, features, and expenses. It’s likely that you depend on your agent’s guidance and expertise to help you select the coverage that fits your health realities and your lifestyle.

It’s a good idea to have an agent you can trust, but it’s also a good idea to have an understanding of out of pocket expenses before choosing an agent. This will help you understand how a policy will impact your wallet and help you identify which questions to ask your agent before making a final decision.

Let’s take a look at some of these expenses and consider how those they relate to two popular coverage options: short-term medical and health benefit insurance plans.

Deductible

This refers to the amount you pay for yourself before your insurance carrier pays benefits.

If you’re concerned about the cost of deductibles when facing common illnesses such as a cold, an ear infection, pink eye, or strep throat, you may be interested in coverage that includes a telemedicine as a feature.

Telemedicine meets you where you are by allowing you to connect with doctors via phone, video, smartphone, or computer and reducing travel time, anxiety, and time away from family and responsibilities. This feature is available with many short-term medical and health benefit insurance plans as well as traditional healthcare coverage plans.

Copay

This refers to the amount you pay to your providers at the time of service. The amount may vary depending on the type of service you receive and typically does not count toward your deductible.

Affordability is undoubtedly one of your primary concerns when choosing healthcare coverage. Many short-term medical plans offer low out of pocket copays for doctor’s office visits and wellness care. However, the benefits may be more restricted as well since these plans do not need to meet the 10 essential health benefits. They also do not cover preexisting conditions.

If you need another type of coverage and/or if you are considering supplementing your major medical coverage, you may benefit from health benefit insurance, as this type of policy may be cost effective and provides cash benefits to pay for a variety of expenses, including copays. Keep in mind that there may be limitations and/or restrictions, so be sure to fully review the circumstances under which payment can be received.

Coinsurance

This refers to the amount you pay to your provider for services rendered after you pay your deductible and after your carrier covers its portion. This amount is a form of cost sharing and is in addition to the copay that is paid at the time of the visit.

Short-term medical plans offer a variety of coinsurance options, including a 100%/0% option. This can allow you to circumvent a coinsurance payment and would task your carrier with paying 100% of the fees. Keep in mind that short term insurance plans do not cover preexisting conditions and are not required to cover 10 essential health benefits, including maternity and newborn care, mental health and substance abuse disorder services. Check any plan details carefully to understand what is covered.

Health benefit insurance plans do not offer coinsurance options, as they provide fixed cash benefits for specific covered expenses.

 

Note: It is important to keep in mind, that while short-term and health benefit insurance coverage can provide valuable benefits benefits, neither one is intended to be a replacement nor an alternative to ACA or other major medical plans. These types of coverage do not provide the minimum essential health benefits that are required and will not help to avoid the fee for not carrying health insurance.

 

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