Understanding your Co-Pay, Deductible, and Medical bills One of the most common calls we get at our office involve either co-pays, deductibles, or the actual bill you receive after your insurance covers their portion of the cost. The reason it is all so complicated is that EVERYONE’s medical coverage is different depending on your plan, employer, insurance company, co-pays, deductibles etc. There is no one size fits all answer to most of these questions. It is important for ALL PATIENTS to understand the insurance they have and what out of pocket expenses they can expect. Here I will attempt to break it down into more understandable terms, but in the end you should always have a copy of your explanation of benefits from your insurance provider as well as your out of pocket expenses. Here are some basic definitions before we start; taken from the blue cross blue shield website.
A deductible is the amount you pay for health care services before your health insurance begins to pay. Let’s say your plan’s deductible is $1,500. That means for most services, you’ll pay 100 percent of your medical and pharmacy bills until the amount you pay reaches $1,500. After that, you share the cost with your plan by paying coinsurance and co-pays.
Remember, your deductable starts over again every year!!
Coinsurance is your share of the costs of a health care service. It’s usually figured as a percentage of the amount we allow to be charged for services. You start paying coinsurance after you’ve paid your plan’s deductible. Here’s how it works. Lisa has allergies, so she sees a doctor regularly. She just paid her $1,500 deductible. Now her plan will cover 70 percent of the cost of her allergy shots. Lisa pays the other 30 percent; that’s her coinsurance. If her treatment costs $150, her plan will pay $105 and she’ll pay $45.
Co-pay is a fixed amount you pay for a health care service, usually when you receive the service. The amount can vary by the type of service. You may also have a co-pay when you get a prescription filled. For example, a doctor’s office visit might have a co-pay of $30. The co-pay for an emergency room visit will usually cost more, such as $250. For some services, you may have both a co-pay and coinsurance.
Ok, now that we have some basic definitions understood, let me try to break down how the billing side works. I will start by saying that medical billing is VERY complicated and many people have 4 year college degrees in medical billing; so I’m going to simplify as much as possible!
When you are seen for medical services, there are set billing codes that attach to each diagnosis, level of care, and place of service. For example; the level of care for an ear infection will not be the same as a laceration or heart attack. These codes are not created by your medical provider; they are set in stone by the insurance companies as is the level of care. If you are seen for a cold virus and receive no prescriptions, your level of care if lower than being seen for a sinus infection and being put on antibiotics! Also, being seen at your primary doctor where you are considered an established patient is ALWAYS a lower level of care then being seen in the ER or Urgent Care…even if it is for the same ear infection diagnosis!
EVERY medical provider who accepts insurance and is in-network has a contract with that company; IE Blue Cross Blue Shield (BCBS). The contracts that are in place protect YOU, the consumer from being over charged or billed incorrectly. We often get calls asking why we billed X amount for an ear infection etc. It sounds crazy but the amount billed to BCBS does not matter if you are an in-network provider because it always drops to the contracted rate! It all comes back to the contract and YOUR insurance coverage.
Level 3 visit : $200 billed to BCBS. BCBS says ok…. $200 billed, contracted rate $150. So BCBS automatically takes off $50. They do NOT pay your medical provider that $50…they say “nice try”…contracted rate is $150. They then pay whatever portion is theirs according to YOUR insurance plan. For example…. If you have 100% coverage and have met deductibles, they will pay your medical provider $150. If you have an 80/20 plan, they will pay your medical provider $120, and send you a bill for the other 20%; $30.
So it does not matter if your provider bills $500 or $200 for an ear infection… the contract will still reduce the charge to the contracted rate of $150; then pay whatever portion is covered based on your plan! Now take this same $200 bill, contracted down to $150. If the patient has a $5,000 yearly deductable that has not been met, they will be sent the entire $150 bill! So, depending on your deductable, you might be seen in January for an ear infection and get a $150 bill, then be seen in October and only get a $30 bill because at one visit the deductable was not met and at the second visit it was!
Because of the very reason listed above; it is SO important for you to know what you’re deductable is and if any changes occurred to your policy starting the first of the year!! Often times a deductable will be increased and the consumer are not aware of it! Understanding your plan and coverage will help you plan for visits as well as understand your bill when you receive it. You should always call your insurance company as well prior to any “special” services to see if they are covered in your plan; for example: yearly physicals? Immunizations after a certain age? Blood work? School and Sports physicals? If your plan does not cover these services and you are seen by a medical provider, your insurance company will DENY the ENTIRE bill and send the full cost to you!
Being educated about your coverage is the MOST important thing you can do!!!!!
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*the prices in this article are only an example, not actual costs