Q: I have health insurance through my employer to protect my family. What is the difference between a co-pay, co-insurance, premium and a deductible?
A: There are many expenses related to health insurance. Let's review the most common terms to understand better what the different terms refer to.
Premium: This is the monthly cost of your insurance in order to provide the health insurance coverage for you and/or your family. Often times your employer will pay a portion of the premium as part of your employee benefits and you pay the balance of this cost. Your portion of the premium may be divided up and automatically deducted from each paycheck or may be paid in one monthly payment.
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Deductible: Having a deductible to meet is nothing new to the insurance world. The deductible amount is what must be paid first before co-pays and possibly co-insurance take effect. A deductible ''starts over'' after 12 months; typically the first of the year. Some insurance plans cycle at other times of the year but it is always for a 12-month period. A deductible is an additional cost beyond the premium.
More plans than ever before have deductibles as a part of their structure. In addition, we are seeing much larger deductibles for consumers to meet. This is primarily to help manage monthly premiums. Premiums are typically smaller if the deductible is higher. Think of it this way: if you don't use your insurance, financially you win. If you do use your insurance, meeting the deductible can be a challenge particularly early in the year (cycle) when the deductibles ''start over.''
Co-Pay: A co-pay is determined by your insurance company and not a healthcare provider. This fee is charged for each visit and is expected to be paid at the time of service rather than billed. Co-pays do not get applied towards the deductible. You will not pay a co-pay until your deductible has been met. Then the co-pays take effect. Co-pays can vary depending on the type of services you are receiving. A good example is a co-pay for an office visit with your primary care physician may be $20 while seeing a specialist could be $45 per visit. A visit to the emergency room may be $100 while a co-pay for a generic prescription may be $15.
Co-insurance: When you visit a healthcare provider, that office bills your insurance company their charge for services rendered. Each insurance company determines their own fee schedule. The same services provided to three patients with different insurance companies will pay the provider different amounts. In most cases, healthcare providers will not know ahead of time how much a particular insurance company will deem appropriate fees for services. The term co-insurance is used to describe the percentage your insurance company expects you to pay. This could be in addition to a co-pay and could be 20 percent or even more.
Some insurance plans do not have a co-insurance and once the deductible is met and the co-pay is paid, they pay everything over and above that at 100 percent.
Medicare: In recent years, many health insurance providers have established their own plans to replace or supplement traditional Medicare as offered through the government. These plans each have their own monthly premiums and set of co-pays and stipulations. Before you make the decision to consider any insurance plan for your needs, be sure to ask lots of questions and understand the structure of the plan you are selecting. One size does not fit all. Insurance counseling is available through the Office for the Aging and Janell Sluga at Lutheran Social Services. It's a good idea to have someone help you select the plan that fits your needs rather than be surprised with high co-pays you weren't expecting.
Understanding your benefit: Many of us struggle to understand the insurance coverage and the financial responsibilities we are agreeing to. We urge all of our patients to contact their insurance company to ask questions about coverage, co-pays, deductible, co-insurance and even services that may need to be authorized by your insurance carrier. Remember, you are the customer and have every right to fully understand your health insurance benefits. We urge our patients to call the number on the back of their insurance card to inquire about the specifics of their unique plan. It can be complicated to understand. You should get an ''Explanation of Benefits'' (EOB) from your insurance company to help you understand the amount that was invoiced by the provider and the amount ''allowed'' that is determined by the unique insurance plan. But even if it's not the answer you were hoping for, understanding your benefit is your right as a customer of the insurance company.
As a premier provider of physical and occupational therapy in our community for more than 10 years, we have helped thousands of patients improve function and relieve pain through individualized treatment programs. Physical and occupational therapists evaluate and address the underlying cause of a patient's pain or dysfunction using a diagnostic approach. We offer free consultations, have convenient hours and accept most insurance plans.
Chautauqua Physical & Occupational Therapy is located in the Riverwalk Center, 15 S. Main St., Suite 220, Jamestown, NY 14701. For more information, call 488-2322, email cpt@stny.rr.com or visit www.chautauquapt.com.