Understand these elements to save money
The most important reason for having health insurance is protection from “insurable events” or claims that would be difficult to pay for out of a checking or savings account. In the case of large, unexpected and infrequent medical bills, $30,000 to $500,000+, health insurance provides financial protection from bankruptcy and loss of home and assets.
To understand health insurance you must first understand the three basic elements included in every insurance policy: deductible, cost-sharing (or coinsurance) and out-of-pocket maximum.
- The Deductible: The amount the plan member pays before the insurance company pays anything. If member has a large, unexpected medical bill, and the plan has a $1,300 deductible, the member must pay the first $1,300 before the health plan will pay any of the bills.
- Cost-Sharing or Coinsurance: After meeting the deductible, the plan member and the insurance company share the remaining expenses, with the insurance company paying a larger portion (e.g., 80%) and the plan member paying a smaller portion (e.g., 20%). Cost sharing typically applies to large expenses such as hospital, inpatient and outpatient surgeries and more expensive imaging tests.
- The Out-Of-Pocket Maximum (OOP Max):The most a plan member will pay in any calendar year. After an individual reaches his/her OOP Max, the insurance company will pay all remaining expenses.
In the following table, the plan details are based upon “model” plans; each company’s health insurance plans may have slight variations compared to these model plans. In general, more expensive plans will have a lower deductible, smaller coinsurance, and a lower out-of-pocket maximum. More affordable plans will have a higher deductible, larger coinsurance and a higher out-of-pocket maximum.
THE METAL PLANS |
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PLATINUM | GOLD | SILVER | BRONZE | |
Actuarial Value | 90% | 80% | 70% | 60% |
Premium | $$$$ | $$$ | $$ | $ |
Deductible | $0 | $750 | $1,300 | $5,000 |
Coinsurance Cost-sharing |
10% | 20% | 30% | 40% |
Max OOP IND Family (2+) |
$4,000 $8,000 |
$5,500 $13,500 |
$6,800 $13,600 |
$6,550 $13,000 |