Understanding Health Insurance Basics
By now, most people in the U.S. have some level of health care coverage. But do you know what you are actually getting in return for paying your monthly premiums each month? Understanding your benefits will help you budget better and minimize unexpected costs when you do seek care. Each health plan has a summary of benefits that stipulate the services that are covered and what those services will cost. Here are some of the common terms you will see in a summary of benefits:DEDUCTIBLE
This is an amount that can range anywhere from $0 to thousands of dollars. It represents how much of your own money you must spend on healthcare before the health plan benefits kick in for the rest of the calendar year. There are some general exceptions — typically preventive health care services like office visits — which may be covered without having to meet the deductible first.
How it matters
If you have acupuncture benefits, check to see whether the deductible applies. You may end up paying for the full cost of treatment because your deductible hasn’t been met.In such cases, paying with funds from a Flexible Spending Account (FSA) or Health Savings Account (HSA) can help recoup a portion of your costs by way of tax savings. And by the way, if you have money in your FSA, it must be spent before the end of the calendar year, or you lose it. Last December, I had some patients trying to squeeze in appointments so they could spend down their remaining funds. Now is a good time to check your account’s balance and avoid a last-minute scramble.
COPAY/COINSURANCE
The copay is a fixed amount, typically between $10–$50, which you pay at the time of service, e.g. a doctor’s office visit or prescription drug. Coinsurance is a variable amount that you pay for services. It is calculated by taking a percentage of the plan’s defined allowable amount for the particular service. For example, suppose your coinsurance is 20%. If you get a blood test and and the plan’s allowable amount for that test is $200, then you are responsible for $40 of that bill.
How it matters
Your plan may set different copay and coinsurance rates depending on the type of provider and type of service. Copays are common for acupuncture, but some people do have a coinsurance, usually between 10–40%. My patients with insurance typically pay $40 or less per visit. That’s a good a discount on treatment, so don’t let your benefits go to waste!
OUT-OF-POCKET MAXIMUM
This number represents the maximum amount that you will spend out-of-pocket for the entire year. With some exceptions, once you hit that maximum, you will not have to pay anything more for covered services for the rest of the year. Once January 1 rolls around, this number, like the deductible, is reset back to zero.
How it matters
If you expect to undergo expensive procedures such as surgery or delivery of a baby this year, chances are you will meet your out-of-pocket maximum. That means no more copays or coinsurance payments for the rest of the year! What’s better than discounted acupuncture? Free acupuncture, of course!
PROVIDER NETWORK
Providers who agree to participate in your health plan’s network and accept lower payments for their services. Some plans only will cover services if you see a network provider. Others will allow you to see an out-of-network provider but you may face higher copayment, coinsurance, and/or deductible amounts.
How it matters
A provider may tell you that he or she accepts your insurance, but that doesn’t mean they are in-network with your health plan. If your priority is to keep your costs low, check with your health plan to find an in-network provider. On the other hand, if you have a favorite acupuncturist who’s out-of-network with your health plan, you might still be able to get your treatments covered by the plan.
AND THERE’S MORE…
What I’ve described above are just the basic elements around which most health plan benefits are structured. But keep in mind that there are always plenty of exceptions — which I will discuss in a future post, so stay tuned! In my practice, I always offer to help new patients verify their acupuncture benefits with the health plan before their first appointment. That way, there are no surprises charges to spoil that post-acupuncture bliss.
Teresa Lau is a licensed acupuncturist in the State of California. She completed her Master of Science degree in Traditional Chinese Medicine at the American College of Traditional Chinese Medicine (ACTCM) in San Francisco, CA, as well as a master’s degree in Public Health from Harvard School of Public Health.