Paying for Care: An Overview of Copays, Co-Insurance and Deductibles
Because insurance can be tricky to navigate, here is a brief overview of three insurance components that affect patients.
Treatment for chronic wounds, diabetic supplies and even surgery (when needed) all usually comes with some type of payment. However, insurance can be a tricky road to navigate, especially when your condition changes or you transition to another provider. Here is a brief overview of the three main financial components of insurance that affect patients:
Copayments, more commonly referred to as copays, are the amount of out-of-pocket costs patients pay for routine care. This amount is often the same for all similar procedures. For example, a visit to the dentist to get your teeth cleaned may cost $25, while a visit to the mental health provider may be $30 for every visit. It should be noted that some specialty procedures – or those considered outside of the network by your insurance provider – may cost more or have a different copay amount.
Copayments are also used for different prescription medications, and often have a set amount for certain medications. Some may have a different copayment amount than that listed on your insurance card. It is often the case that generic prescriptions – so a non-brand name pain reliever vs. a well-known brand – will cost less, while specialty prescriptions will generally cost a little more than your stated copay.
Copayments are used to complete the total payment for the procedures to the clinician. Your insurance company will pay the remainder of the bill for the clinician’s services.
Co-insurance is similar to copay in that it is a way for you and your health insurance provider to divvy up the clinician bill. These costs are often done by percentage, with a common breakdown being the patient pays 20 percent of the bill, while the insurance pays the remaining 80 percent of the costs of care.
However, these percentages are also dictated by Maximum Out-Of-Pocket costs. These maximums dictate how much a patient will pay per year for routine care. For example, if a patient’s routine check-ups total $1,200 for 2013 but his or her Maximum Out-Of-Pocket costs are $1,000 for the year, her insurance company will pay the remaining $200.
Many insurance companies also have Lifetime Maximums set for each insurer, and when an individual’s total health costs go above this, coverage will end.
A deductible is the amount of costs that you must pay for certain procedures before your health insurance company will take over on costs. Deductibles are most commonly used for health situations that are non-routine, such as blood tests, surgeries, and injuries or conditions that warrant a hospital stay or visit. Deductibles are most useful when a large procedure is performed, such as an invasive surgery like a heart bypass – with a surgery like this, a deductible will likely be met, and the insurance company will pay for the remainder. If you have a few small procedures, the deductible will likely not be met, and the patient will have to pay the entire cost.