Understanding Health Care Costs | Presbyterian Health Plan, Inc.

Healthcare expenses don’t stop once you’ve paid your monthly plan premium – there may be co-payments, coinsurance and deductibles to consider.

WHERE TO FIND THE BEST INFORMATION

After you sign up for a health plan, you’ll get a summary of your benefits. Be sure to read these details so you know what’s covered by your plan and what your share of service costs will be.

PATIENT COSTS

Health care costs are usually shared costs – you pay some of the expenses, but so does your insurance company and your employer (if you have insurance through your employer) or the government. Your portion could include:

• Premiums are the payments you or your employer make, usually each month, to participate in a plan. Think of premiums as a subscription, like a magazine. If you do not pay your premiums, your “membership” of the insurance is cancelled.

• Franchises are what you pay for health services before your insurance plan starts paying for the services. For example, if your deductible is $2,500 per year, you must pay that amount — for lab tests and procedures and other care — before insurance starts paying. Generally, premiums and co-payments do not count towards your deductible.

• Copays (also called co-payments) are a fixed amount you pay for a specific visit or service. Your co-pay is usually a very small amount compared to the total cost of this office visit.

• Coinsurance: Coinsurance is the percentage you pay for a covered service after the deductible has been paid. Say a scanner is covered by a 20% coinsurance and the scanner costs $1,000, you will only pay $200 for the scanner as long as your deductible is met. (If your deductible has not been reached, you will pay the amount of your remaining deductible, then 20% of any costs over your deductible.)

• Boundaries: Some insurance plans limit the amount of coverage you can get in a year for a specific treatment or service. For example, your specific plan may cover up to eight mental health visits or up to $400 in speech therapy per year.

• Disbursement limit: This is the maximum you will pay for health services during an insurance period (usually one year) before your health insurance plan pays 100% of the covered benefits. The limit does not apply to the amount spent on bonuses.

PLAN AHEAD: PAY HEALTH COST

If you know you’re going to have big health care expenses coming up, you might consider setting up one of the following tax-deductible accounts to help pay for eligible health care expenses:

• Health savings accounts (HSA) may be offered with qualified, high-deductible (HDHP) health plans. An HSA is an individual, FDIC-insured savings account that allows you to make pre-tax contributions and earn tax-free interest.

• Flexible Spending Accounts (FSA) are often used with plans set up by your employer. An FSA allows an employee to set aside income to pay for certain health-related expenses. Similar to an HSA account, money deducted (withdrawn) from an employee’s salary is not subject to payroll taxes.

OTHER TIPS TO REDUCE YOUR COSTS

• Understanding the diet: In the long run, it pays to take the time to choose coverage that meets your needs and those of your family.

• Stay connected: All plans have a network of providers who have agreed to receive reduced amounts to help reduce costs for you and the insurance company. Choosing in-network providers will cost you less.

• Stay healthy: Preventive care is cheaper for everyone.

• Switch to credits: Unless otherwise directed by your doctor, ask your doctor to write your prescription for a generic drug (if one is available). Generic drugs are regulated by the FDA and have the same active ingredients, safety, performance, quality, and strengths as brand name drugs. And they are almost always cheaper.