Understanding Your Insurance
Adulting is hard, you know? You’ve got bills to pay, debt to pay off, taxes to file, and so much more. And the worst part? Most of the time, we have no idea what we’re doing. It’s not like they explain these kinds of things in school— even though they probably should. And what about insurance? What do all of those terms even mean? Like deductible. Seriously? What’s that supposed to be?
Luckily for you, I did all the research, so you wouldn’t have to. And let me tell you… it wasn’t fun. But without further ado, here are some terms you might come across when dealing with your insurance policy and what they mean!
What’s a deductible?
This is the amount you pay for covered health care before your insurance plan starts to pay out. So, yeah, your insurance doesn’t start coverage until you meet that. For example, some plans may require you pay out the first $1,000 before the insurance company will start coverage. Ouch. After you meet that deductible, your insurance will start to pay out. Sadly, deductibles reset after a year. So, try to reach this early so you can take advantage of coverage as long as possible. This amount also corresponds with how much your premium is. Luckily, some services, like check-ups, might be exempt from your deductible
But what the heck is a premium?
This is the amount you pay for your health insurance every month. If you have employer-provided insurance they may pay part, or all, of the premium. But if you’re not that lucky, it all falls on you. Also, if you have a high premium your deductible tends to be lower and vice versa. The best plan for you might be one with a lower premium and a higher deductible if you can’t fork over a whole lot of money to pay for insurance every month.
This is the percentage of costs you pay for a health care service after you have met your deductible. For example, if you have a 20% coinsurance you only pay that much of your medical bill. So, if you have a bill of $100 you will only pay $20. Make sense? Good. But don’t get your coinsurance confused with your copay.
Then what’s the difference between coinsurance and copay?
Copay is the fixed amount you pay for health care services after you’ve met your deductible. For example, you may pay $25 when visiting a primary care physician. Copays often vary from service to service. You should check your insurance to see what those amounts are. Your primary care provider’s copay may be lower than your copay for urgent care, maybe not. It depends on the plan!
What is out-of-pocket maximum?
This is also referred to as the “out-of-pocket limit.” This is the most you have to pay for covered services during the span of a year.
What is a network?
You’ve probably heard this one a lot but not know exactly what it means. A network is a group of providers and doctors who accept your insurance. You need to make sure a provider is in your network before you go to see them. If not, you could end up having to pay for everything out of pocket, and nobody wants to do that. Do your research before picking a provider, guys. Save yourself the time and money.
How much does your insurance cover for prescriptions?
You should check how much insurance covers for your prescriptions, especially if you need a lot of them or have some that are pretty expensive. This is really important since so many of us rely on different prescriptions to go about our day to day lives. If possible, try to find an insurance that covers as much of your prescription cost as possible.
Of course, every insurance policy is different, but this information stands true for all of them. Check your insurance to see what your rates are. And make sure to read the fine print of your insurance to avoid any potential pitfalls! Don’t let them screw you over! Ensure your insurance is a good fit for you and your family if you’re providing for them, too. You don’t want to get everyone tied up in a bad plan. Insurance that was good for you while you were single may not be as good for a family if you’re recently married.
Stay up to date on your policies, and good luck trying to understand all of it!