Anyone understand health insurance plans?

[JoeyBoy718]

Does anyone understand how health plans work? I think I understand the concept but some of the numbers don't seem to add up.

So I found a plan that looks like this:
Deductible = $500, Out-of-pocket maximum = $6850, emergency room = $250 copay, primary care co-pay = $15 copay.

Now, from what I understand of out-of-pocket maximum, after you meet your deductible, you'll continue to pay things like co-pays until your total paid (deductible + all co-pays) reaches the out-of-pocket maximum, then after that, the state will pay everything.

So in the example I gave above, the deductible is much lower than the out-of-pocket maximum. After you meet the $500 deductible, you'd have to basically go to the emergency room 26 times to reach the out-of-pocket maximum.

Also, I think I understand that primary care doesn't affect your deductible. So then what does affect your deductible?

 

[Hoofbite]

Usually you hit your deductible and then insurance will split the cost of whatever else like 80%/20% until you hit your out of packet max.

I'm not sure but co-pays generally don't count towards your deductible. The flat-flee is considered to be the "benefit". You pay less than you would have without insurance even though the biller doesn't receive anything close to the cash price when reimbursed through insurance and adding in the copay. Say the cash price for a prescription is $50 but the copay is only $10, the insurance company isn't paying the pharmacy $40. They may give the pharmacy a couple of bucks and the pharmacy agrees because the cost of the medication and labor to process this single prescription isn't anywhere close to cash price.

Some insurances may count copays toward the deductible but it wouldn't shock me if all your copays were excluded. They do have to count towards the out of pocket maximum. That was one of the changes that took place recently.

So you go to the emergency room and rack up a $400 bill. You pay all of it, and your insurance only credits you the amount beyond $250 towards your deductible. You go again, same thing, and now you're $300 into your deductible. Go again, but this time your bill is $450. You cover it all except for now you have met your deductible. You've spent $1,250 but the insurance doesn't recognize $750 of that towards your deductible.

Next time you go to the ER your bill is $500. Your insurance only recognizes the $250 above your copay and they'll "cover" 80% of it. You cover $50 of the bill above $250 and now your out-of-pocket total is at $1,550.

Of course, the average cost of going to the ER is well beyond $400 or $500 dollars. It's like $2,000. So you get a bill for that after 1 visit. You pay the $250 copay, which leaves $1,750 left. You pay your $500 deductible, which leaves $1,250 left. You pay 20% of that which is $250 dollars.

So you've paid $1,000 of the $2,000 bill. All future costs to you will be at 20% the billed rate, which means you have to rack up another $33,000 (you pay 20%) in medical bills before you hit your out of pocket maximum.

So once you hit your deductible, each visit afterward will cost you $550 and apply toward your out of pocket maximum. $250 in copay, and 20% of $1,750 in coinsurance. I guess you'd need to go about 10 or 12 times to reach your out of pocket maximum. Or spend a week in the ICU.

 

[JoeyBoy718]

Usually you hit your deductible and then insurance will split the cost of whatever else like 80%/20% until you hit your out of packet max.

I'm not sure but co-pays generally don't count towards your deductible. The flat-flee is considered to be the "benefit". You pay less than you would have without insurance even though the biller doesn't receive anything close to the cash price when reimbursed through insurance and adding in the copay. Say the cash price for a prescription is $50 but the copay is only $10, the insurance company isn't paying the pharmacy $40. They may give the pharmacy a couple of bucks and the pharmacy agrees because the cost of the medication and labor to process this single prescription isn't anywhere close to cash price.

Some insurances may count copays toward the deductible but it wouldn't shock me if all your copays were excluded. They do have to count towards the out of pocket maximum. That was one of the changes that took place recently.

So you go to the emergency room and rack up a $400 bill. You pay all of it, and your insurance only credits you the amount beyond $250 towards your deductible. You go again, same thing, and now you're $300 into your deductible. Go again, but this time your bill is $450. You cover it all except for now you have met your deductible. You've spent $1,250 but the insurance doesn't recognize $750 of that towards your deductible.

Next time you go to the ER your bill is $500. Your insurance only recognizes the $250 above your copay and they'll "cover" 80% of it. You cover $50 of the bill above $250 and now your out-of-pocket total is at $1,550.

Of course, the average cost of going to the ER is well beyond $400 or $500 dollars. It's like $2,000. So you get a bill for that after 1 visit. You pay the $250 copay, which leaves $1,750 left. You pay your $500 deductible, which leaves $1,250 left. You pay 20% of that which is $250 dollars.

So you've paid $1,000 of the $2,000 bill. All future costs to you will be at 20% the billed rate, which means you have to rack up another $33,000 (you pay 20%) in medical bills before you hit your out of pocket maximum.

So once you hit your deductible, each visit afterward will cost you $550 and apply toward your out of pocket maximum. $250 in copay, and 20% of $1,750 in coinsurance. I guess you'd need to go about 10 or 12 times to reach your out of pocket maximum. Or spend a week in the ICU.

Thanks for the examples. I guess I see how some of these numbers can be misleading. They draw people in with a low deductible but then hit them with a high copay and maximum. One thing I'm curious about in your examples is that you kept saying they'd pay 80%. Where did you get that from?

 

[CashMan]

Thanks for the examples. I guess I see how some of these numbers can be misleading. They draw people in with a low deductible but then hit them with a high copay and maximum. One thing I'm curious about in your examples is that you kept saying they'd pay 80%. Where did you get that from?

Usually, insurances have some sort of plan like an 80-20(you pay 20% they pick up 80%). So, if your monthly amount for the insurance is higher, they probably pick up more. I've seen, 80-20 and 70-30, I am sure it goes lower, depending on if the monthly fee is cheaper.

 

[CyberB0b]

Thanks for the examples. I guess I see how some of these numbers can be misleading. They draw people in with a low deductible but then hit them with a high copay and maximum. One thing I'm curious about in your examples is that you kept saying they'd pay 80%. Where did you get that from?

It's in your plan. They call it coinsurance.

 

[LittleBoyBlue]

Scam

Created a co-pay. So you pay insurance THEN you go into your pocket upon arrival = co-pay.
Designed to get more $$ out of your pocket

Now, you walk in. After paying insurance already, you pay co-pay when you arrive.... And... A few weeks later you get another invoice for you to cover the portion that insurance didn't cover. Ie. Insurance covers 85-90% and you pay the other 10-15%

SCAM

 

[CashMan]

Scam

Created a co-pay. So you pay insurance THEN you go into your pocket upon arrival = co-pay.
Designed to get more $$ out of your pocket

Now, you walk in. After paying insurance already, you pay co-pay when you arrive.... And... A few weeks later you get another invoice for you to cover the portion that insurance didn't cover. Ie. Insurance covers 85-90% and you pay the other 10-15%

SCAM

Preach on Brother!

 

[JoeyBoy718]

My company is offering to cover up to $200 on a plan. The cheapest possible plans are around $180. The one I mentioned in the OP is $260 so I'd have to pay $60 a month out of pocket. I checked and it does have 20% co-insurance, to go along with the other stuff I mentioned in the OP ($500 deductible, $6850 out-of-pocket max, $250 emergency room copay, $15 primary care copay). If all insurance (or at least all affordable insurance) is a scam, then I'll just get one of the $180 ones, not pay anything out of pocket, and hope I never need to use it. But I'm trying to see if it's worth paying $60 out of my own pocket for this plan rather than pay nothing and get something like this: $5000 deductible, $6850 out-of-pocket max, $300 emergency room copay, $25 primary care copay (after deductible), and 40% co-insurance.

 

[YosemiteSam]

This should help you.

 

[CashMan]

My company is offering to cover up to $200 on a plan. The cheapest possible plans are around $180. The one I mentioned in the OP is $260 so I'd have to pay $60 a month out of pocket. I checked and it does have 20% co-insurance, to go along with the other stuff I mentioned in the OP ($500 deductible, $6850 out-of-pocket max, $250 emergency room copay, $15 primary care copay). If all insurance (or at least all affordable insurance) is a scam, then I'll just get one of the $180 ones, not pay anything out of pocket, and hope I never need to use it. But I'm trying to see if it's worth paying $60 out of my own pocket for this plan rather than pay nothing and get something like this: $5000 deductible, $6850 out-of-pocket max, $300 emergency room copay, $25 primary care copay (after deductible), and 40% co-insurance.

I think by law(at least in my state) employers have to cover at least 50% of the insurance, so if they are covering more, good for you. Now, if you are looking at multiple plans, just do some simple math. Calculate how many times you go to the doctor/emergency room, and see how that fits in each plan. Now, it has been a while, but I have had both an HMO and a PPO, and I can tell you from multiple doctors, you are kind of rushed through with an HMO and there are more hoops to jump through, so if you have a choice and it is not too crazy with a price, go with the PPO. IMO, it is better to be over prepared, than under prepared with health insurance.

 

[Hoofbite]

My company is offering to cover up to $200 on a plan. The cheapest possible plans are around $180. The one I mentioned in the OP is $260 so I'd have to pay $60 a month out of pocket. I checked and it does have 20% co-insurance, to go along with the other stuff I mentioned in the OP ($500 deductible, $6850 out-of-pocket max, $250 emergency room copay, $15 primary care copay). If all insurance (or at least all affordable insurance) is a scam, then I'll just get one of the $180 ones, not pay anything out of pocket, and hope I never need to use it. But I'm trying to see if it's worth paying $60 out of my own pocket for this plan rather than pay nothing and get something like this: $5000 deductible, $6850 out-of-pocket max, $300 emergency room copay, $25 primary care copay (after deductible), and 40% co-insurance.

Well, if it helps here's an example.

If you have $10K in medical bills, you'd only pay about $2,400 with the more expensive plan, providing everything applied to your deductible. With the cheaper plan you'd hit your out of pocket maximum of $6,850.

I guess if you plan on having a single year in which you will hit that $10K mark at any point in the next 6 years, you may be better off going with the more expensive plan. That $4,450 difference you spend in the 1 year is equal to 6 years of added premiums. Anything over $10K would close the gap between the two by $0.20 on the dollar.

And of course this is how the pricing works. You pay marginally more for coverage that is likely excessive compared to the basic plan which is more or less catastrophic coverage only. Like data plans. You can pay $40 for 500MB of data, or you can pay $70 for 10GB. You're basically caught between overpaying for too little, or paying more than want for more than you ever use.

 

[CyberB0b]

My company is offering to cover up to $200 on a plan. The cheapest possible plans are around $180. The one I mentioned in the OP is $260 so I'd have to pay $60 a month out of pocket. I checked and it does have 20% co-insurance, to go along with the other stuff I mentioned in the OP ($500 deductible, $6850 out-of-pocket max, $250 emergency room copay, $15 primary care copay). If all insurance (or at least all affordable insurance) is a scam, then I'll just get one of the $180 ones, not pay anything out of pocket, and hope I never need to use it. But I'm trying to see if it's worth paying $60 out of my own pocket for this plan rather than pay nothing and get something like this: $5000 deductible, $6850 out-of-pocket max, $300 emergency room copay, $25 primary care copay (after deductible), and 40% co-insurance.

40% coinsurance with a 5k deductible is almost like not having insurance. Spend the $60 a month and sleep well at night.

 

[JoeyBoy718]

40% coinsurance with a 5k deductible is almost like not having insurance. Spend the $60 a month and sleep well at night.

I agree. I went with the $260 plan.

 

[CyberB0b]

I agree. I went with the $260 plan.

Just curious, is your company providing insurance, or reimbursing you for a personal plan? The latter isn't legal, BTW.

At my last job, we had a 6k deductible. The only thing they offered. One of my co-workers hurt his shoulder. He spent about $4600 out of pocket, between visits, physical therapy, MRI, etc, and never got close to meeting his yearly deductible.

 

[JoeyBoy718]

Just curious, is your company providing insurance, or reimbursing you for a personal plan? The latter isn't legal, BTW.

At my last job, we had a 6k deductible. The only thing they offered. One of my co-workers hurt his shoulder. He spent about $4600 out of pocket, between visits, physical therapy, MRI, etc, and never got close to meeting his yearly deductible.

They're giving me $200 a month cash to cover some of my personal plan. That's not legal? They do it for everyone. It's a small startup but I'd still expect the boss to know better since he's a lawyer and accountant. Not doubting you. Just surprised if true.

 

[JoeyBoy718]

Just curious, is your company providing insurance, or reimbursing you for a personal plan? The latter isn't legal, BTW.

At my last job, we had a 6k deductible. The only thing they offered. One of my co-workers hurt his shoulder. He spent about $4600 out of pocket, between visits, physical therapy, MRI, etc, and never got close to meeting his yearly deductible.

I found an article online that companies with under 50 employees can do it if they set up a Section 105 plan. Not sure what that is but I'll see if my boss goes that route.

 

[Dallas_Cowboys50]

Bunch of gobbledygook, I will never pay for somethin every month, which i still have to pay even more out of pocket for when I try to use it, mandate shmandate. I already thrown enough $ away every month on car insurance.....

 

[CyberB0b]

Bunch of gobbledygook, I will never pay for somethin every month, which i still have to pay even more out of pocket for when I try to use it, mandate shmandate. I already thrown enough $ away every month on car insurance.....

So what is your plan if you get injured in a car wreck or fall down some stairs? You're part of the reason why costs are out of control.

 

[LittleBoyBlue]

This should help you.

 

[CashMan]

So what is your plan if you get injured in a car wreck or fall down some stairs? You're part of the reason why costs are out of control.

He is probably in his 20s, he goes with what he can afford.

Yes, if under 50 employees, you do not have to offer health insurance.

IF you do not have a family, and are relatively healthy and young, I would not spend too much on health insurance.