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.

  1. 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.
  1. 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.
  1. 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

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