I remember my first doctor’s visit without my mom by my side. I was a freshman in college. And the receptionist asked, “What’s your copay?” I stared at her blankly. Was that English she was speaking? I backed away from the counter and quickly called my dad, repeating the question to him. He spouted off some amount, and I skipped back to the counter feeling in-the-know. And then the receptionist slammed me with another one: “And how much is covered after the deductible?” What was she talking about? Why was she using such big words??? I left the counter again, feeling a tad sheepish, and found a corner to huddle in while I dialed up my dad once again. This time he gave me a percentage. Like a good girl, I returned to the receptionist again and announced my findings. And thus began my introduction into the wide, convoluted world of medical insurance.
Just like finances, no one ever taught Johnny and me about insurance. It was just one of those things that we had to jump headfirst into. All we knew was that we needed to have it. Once we got married and were off of our parents’ plans, we hopped onto our university’s insurance. It was the easiest, cheapest choice, but I can’t begin to tell you one single detail of the plan. Insurance details were for the boring adults of the world.
But with time, we’ve realized that the details of our insurance are kind of important. After all, thanks to our insurance when Baby Girl was born, we got a free baby. And so with the start of Johnny’s new job, we’ve been looking at every nook and cranny of his insurance and my insurance and figuring out which plans or combinations of plans will a) keep us well covered and b) save us the most money.
And so, ladies and gents, I present Joanna’s Dictionary of Insurance Terms (complete with yawn breaks):
The premium is the amount you’re responsible for paying each month for your insurance. Some companies cover this cost at 100%, but most companies subsidize part of this cost, while the employee is expected to pay the rest. In other words, this cost could range anywhere from zero dollars to several hundred dollars per month.
For any regular old doctor’s visit, your insurance will typically have a flat rate that you pay. It might be $15, or it could be closer to $40. And if you’re going to see a specialist, you could be paying twice those amounts. And the ER? Depending on your insurance, it could cost $50 or maybe $250. And urgent care facilities are always a higher amount, too, so be sure to know before you go. Know before you go! How’s that for a mantra?
The deductible is the amount you get to pay before the insurance starts covering anything. Deductibles go towards expenses like surgeries, ultrasounds, lab tests, etc. If it’s just a normal doctor’s visit, the copay should cover it. So let’s say you have a $10,000 surgery, and your deductible is $2000. If you haven’t met your deductible for the year, you’ll have to pay whatever amount it takes to reach $2000. And then that leaves $8000 left. So what happens with the $8000? Well, it depends (aka, continue reading, yo!).
As a side note, many insurance companies will cover 100% for preventive care, regardless of the deductible. So you pay $0 for preventive stuffs. Now get your behind to the doctor and get that yearly check-up/immunization you’ve been needing pronto.
[5-second yawn permitted]
Coinsurance (Percent Covered After Deductible):
If your insurance covers 100% after deductible, you’re a lucky soul. And you owe $0 on that $8000 mentioned above. However, most plans cover 50% or 60% or 80%. If your company covers 80%, you’re left with a $1600 bill.
Once you’ve reached your deductible and your insurance is paying, say, 80% of everything, you also might have an amount that, if met, insurance will pay 100%. So let’s say that number is $10,000. Once you’ve met your deductible and then paid the 20% you owe up to $10,000, your insurance will pay everything else. This would probably only be used if you had a serious injury, surgery, or illness that resulted in lots of medical bills.
Even after the maximum out-of-pocket is met, your insurance company may have an absolute maximum they’ll pay. It could be $200,000 or maybe $2 million. Or, if you’re lucky, there is no maximum. This is only a number that would come into play with a very serious, recurring sickness that costs hundreds of thousands of dollars.
And so, considering the above factors, Johnny and I crunched the numbers and chose the insurance plan that made the most sense for us, which in our case means that Johnny will go on his new employer’s plan solo (see ya!) and Baby Girl and I will stay on my plan. And now, folks, this yawn-worthy topic can be put to rest and we can all go back to being the non-boring adults of this world.