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Your Guide to Health Insurance Benefits

Health insurance coverage can help make sure that a medical emergency doesn’t turn into a financial one. But if you’re unfamiliar with the many terms and conditions of your health insurance policy, it can be difficult to know what is covered and what is not. And that’s why we’re here to help make sense of it all.

When you understand what’s covered and what you’re expected to pay, you can make informed decisions about your care. Stay with us as we tackle the ins and outs of health insurance benefits, from what’s covered in your policy to what you’ll be expected to pay.

Which Health Insurance Benefits Does Your Policy Cover?

Before the Affordable Care Act (ACA), also known as Obamacare, insurers could deny coverage to people who had pre-existing medical conditions or used too much medical care.

Now, all ACA-compliant health plans must meet minimum essential coverage standards, such as covering preexisting conditions, providing essential benefits, and offering preventive care at no cost before you meet your deductible.

This means that regardless of your health condition or which plan or provider you choose, your insurer must help pay for certain medical services, known as essential benefits. Here is a list of those essential benefits that must be covered in every ACA-compliant plan:

Ambulatory patient services (outpatient care you get without being admitted to a hospital)
Emergency services
Hospitalization (surgery and overnight stays)
Pregnancy, maternity, and newborn care (both before and after birth, including birth control and breastfeeding coverage)
Pediatric services, including oral and vision care (but adult dental and vision coverage aren’t essential health benefits)
Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
Preventive and wellness services and chronic disease Management
Mental and behavioral healthcare (including substance use disorder services, counseling, and psychotherapy)
Laboratory services
Prescription medications

It’s important to know that while you can buy some non-ACA-compliant short-term insurance plans (less than 12 months), they may have more exclusions and fewer benefits.

Health Insurance Benefits: What Are You Expected to Pay?

Health insurance plans are filled with unfamiliar terms and phrases, and if you don’t have a good grasp of their meaning, you could be caught off guard with some unexpected expenses.

Understanding the fine print of your coverage is essential for making the right health care choices for you and your family. Here’s a closer look at some of the most common health insurance terms you should know:

Co-insurance: For some health services, you share the cost of your care with your health insurance plan. Coinsurance refers to that shared cost, in which you pay a percentage of the total cost of your care, and your insurer pays the rest. The most common co-insurance split is 80/20. This means that the insurance company will pay 80% of the procedure and the insured is required to pay the other 20%.

Coordination of Benefits: It’s common for family members to be covered by more than one health care plan. For example, when a husband and wife both work and choose to have family coverage through both employers.

When you have coverage from more than one health plan (also known as dual coverage), state law allows your insurance company to follow a procedure called “coordination of benefits”. This will determine how much each should pay when you have a claim. The goal of coordination of benefits is to ensure that the combined payments of both plans do not add up to more than your covered health care expenses.

If a person is covered under two health insurance plans, they stand to gain because where the primary carrier stops paying, for example with a co-insurance clause, then the secondary carrier may step in and pay the difference. This could leave the enrollee with nothing to pay.

Co-payments: This refers to the flat fee you pay for specific services, and you pay a co-pay until you reach your out-of-pocket maximum.

Your co-pay is typically different for different types of services, including primary care vs. specialty care, and it’s most commonly associated with doctor visits and when purchasing prescription medications.

However, co-payments do not usually apply to all services covered by a health care plan. That makes it important to understand the details of your policy, so that you know what costs you will be expected to pay in full and which you will pay for only partially.

Deductible: Your deductible is the amount of care you pay for yourself, each year, before your health insurance plan will start to cover costs. Deductibles are part of your out-of-pocket expenses when it comes to your healthcare plan. The deductible is usually stated as a yearly amount, so once you’ve paid it, it will not be applicable again until your policy renewal date.

High-deductible plans: The higher the deductible amount in your policy, the less expensive your premiums will typically be. The reason for this is because when you choose a high-deductible plan, agree to pay more of the medical costs yourself out-of-pocket, and so the insurance company doesn’t charge you as much for the premium. A high-deductible plan is any plan that has a deductible of $1,400 or more for individual coverage and $2,700 or more for family coverage. In addition to lower premiums, most high-deductible insurance plans offer a health savings account (HSA), which can help you manage health care costs and save more money. A high-deductible plan is often the best choice if you’re young and healthy and rarely use your insurance outside of preventative care.

Low deductible plans: A low-deductible policy carries a lower deductible, meaning that when you get sick, you pay less money upfront before your plan starts paying. However, the trade-off for a lower deductible is that you’ll pay more for your monthly premium.

Low-deductible plans make managing and predicting health care expenses easier since you won’t have to worry about out-of-pocket expenses that you can’t afford. This could be especially helpful in the event that you need surgery or develop a serious illness. The only drawback is that if you don’t end up needing extensive medical care, you will have paid a higher monthly premium than necessary. A low-deductible plan is a smart choice for the following circumstances:

If you’re older
If you have a chronic health condition
If you’re pregnant or planning to have children
If you require expensive medications

Out-of-pocket: Out-of-pocket expenses are the costs of medical care that you’ll have to pay on your own, without the help of insurance. Out-of-pocket costs include deductibles, coinsurance, and co-payments for covered services plus all costs for services that aren’t covered by your policy.

The good news is that most insurance plans set an out-of-pocket maximum, which is a limit on the amount of money you have to pay for covered health care services in a plan year. Once you meet your deductible, your plan will start to pay its share of health care costs for the rest of the plan year. If you have dependents on your plan, you could have individual out-of-pocket maximums and a family out-of-pocket maximum. This depends on the terms of the plan.

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