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What is a
deductible? The deductible is the amount that you are responsible for before the insurance company begins paying anything, for example: if you have a $500 deductible you are responsible for the first $500 of bills per person in that year before the company begins paying claims. Some plans may have a special doctor visit co-pay or co-insurance where the deductible wouldn't apply for doctor visits, you would simply pay what ever the co-pay or co-insurance was and not worry about the deductible. Most plans have a "family deductible limit" which is usually the total of 3 deductibles in a year. Basically what this means is you will only ever have to pay a maximum of three deductibles in a year so as an example if you have a family of six people and you are all together in the car and get in an accident you will not have to meet six separate deductible, you would max out at three. |
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What is a co-insurance? The co-insurance is the percentage that you will pay once the deductible is met. For example: if you have an 80/20 co-insurance once you have met your deductible you would pay 20% of the bill and the insurance company would pay 80%. Most plans have an "out-of-pocket-maximum" on the co-insurance which means the co-insurance stops at a certain point. For example: if it says it's an 80/20 co-insurance to $5,000, it simply means that you will pay 20% of the next $5,000 worth of bills and the company would pay 80% In this case your maximum out of pocket on your co-insurance in a given year would be $1,000. If you had a $500 deductible with the co-insurance 80/20 to $5,000 your TOTAL maximum out of pocket expenses for a given year would be $1,500 per person. |
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What is a co-pay? Some plans offer what is called a doctor "co-pay". This is simply a flat amount that you would pay for a doctor visit instead of having to worry about meeting your deductible first. For example if you have a $25 doctor visit co-pay you would only pay $25 for the visit and the company would pay for the rest of the bill. |
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So how do these all work together? To recap; first you must meet your deductible in a given year, once the deductible is met you will go into the co-insurance where the insurance company will pay a percentage of the bill and you will be responsible for the remainder until you reach a specified dollar amount. Once the co-insurance has been met the insurance company will then kick in 100% up to the lifetime maximum amount of the policy. Remember some plans have a doctor visit co-pay where you would only have to pay a flat amount for a doctor visit without having to worry about the deductible or co-insurance, or as mentioned before with Wellmark you would just pay 10 or 20 percent as opposed to a flat doctor visit co-pay. |
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What is an exclusion rider? An exclusion amendment rider is something the health insurance company attaches to a policy specifically excluding a certain pre-existing condition such as high blood pressure or diabetes. These riders can be for a specific length of time such as 2 years or can be indefinite. One thing to consider with exclusion riders is the fact that the exclusion may involve a broader range of conditions than one would think, hypertension for instance will result in an exclusion of any claims involving the circulatory system meaning heart attacks, strokes, and bypass surgery would all be excluded under the hypertension exclusion rider. For people that receive exclusion riders we suggest visiting the CHIPS website as this is a state program for people that are unable to obtain coverage through a private company. |
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If I receive a rider or decline should I try to apply with another company? It's been our experience that the underwriting is pretty similar across the board through out the different companies, if one company is going to decline or rider a condition then the others most likely would as well. Again in this situation we would refer you to the CHIPS program. |
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What is a PPO? A PPO stands for "Preferred Provider Organization" and is what the majority of health insurance plans are today. A PPO plan requires you to use certain doctors and hospitals that are in the "network" that your health insurance company uses in order to receive full benefits. You still have coverage if you go outside of the network for treatment but the coverage is reduced. Many times your coinsurance will drop from say an 80/20 down to a 60/40 and you may be required to meet a separate deductible for out of network treatment. One more thing to remember is that an emergency situation where you are unable to prescreen who is in the network will usually be treated as in network. |
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What is an HSA? HSA stands for Health Savings Account. These plans combine a high deductible health insurance plan with a tax favored savings account. These savings account grow with tax deferred interested much like an IRA and any funds used for qualified medical expenses are withdrawn tax free. Many people confuse and HSA with a Flex Spending Account that many people are offered through an employer however there is a big difference in the two products. Unlike a Flex plan from an employer, funds added to an HSA are not lost if not used. Also similar to an IRA, funds can be withdrawn from an HSA after age 59 1/2 or rolled over to another tax deferred vehicle. |
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If you still have questions please don't hesitate to ask one of our health insurance specialists at (866) 820-1739 |
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