Understand Your Health Plan Before You Go to the Doc—A New Year Resets Deductibles and Out-of-Pocket Maximums.

It was recently estimated by the National Business Group on Health that the total cost of health care (including premiums and out-of-pocket costs for employees and dependents) would rise to an astounding $14,800 per employee this year. After surveying 170 large U.S. employers, the results suggested that employers would cover approximately 70 percent of those costs, while employees would pay 30 percent. As employee benefit advisors, Partners Benefit Group sees similar statistics among employers in Georgia and the Southeast.

Obviously, it goes without saying that health insurance continues to be a significant expense for employers and employees, so maximizing its value is essential. With a new year upon us, most health plans have hit the proverbial reset button on deductibles and out-of-pocket maximums. Let’s review these important aspects of health insurance to empower ourselves to make wise health care choices.

Deductible: The deductible is the amount you pay for health care before your health insurance policy pays anything. According to widely-reported data, the average deductible varies between $1,500 for single coverage to as high as $8,000 for high-deductible plans. While many people will not use their health plan enough to satisfy the deductible, it is wise to plan that such an event could occur, especially if you have from more than one plan to choose.

Coinsurance: Once the deductible is satisfied, you share health care costs with the insurance plan by paying coinsurance. Coinsurance is a percentage. It’s common to see an 80/20 or 70/30 health plan, which means that the health insurance company will pay 80 percent and you will pay 20 percent of health care costs.

Copay: Most people are used to paying copays for certain health care events like office visits and prescriptions. They are often tiered. For example, visiting a specialist often carries a higher copay than visiting a general practitioner. Where confusion often sets in is when your physician orders further care or testing. Lab work is one such example. Because this falls outside your office visit, the services are subject to the deductible. Knowing this ahead of time allows you to question your physician about the medical necessity of all ordered tests, as well as verify that service providers are in your medical plan network. 

Out-of-pocket maximum: Most plans carry a maximum amount you’ll pay during the plan year. After the amount is satisfied, any further care is paid 100 percent by the insurance plan. Keep in mind that copays and out-of-network providers may be excluded.

There’s good news…

All Affordable Care Act plans include a list of preventive care services that are covered 100 percent by health insurance as long as you go to an in-network provider. Considering these services are designed to keep you healthy, be sure to take full advantage. For a complete list, click here. Also, check with your health insurance carrier about any financial incentives it may offer for completing health assessments, getting flu shots, etc. Many offer generous rewards that may help pay for future health care expenses.

Have additional questions? Please talk with your human resources department or your PBG representative.