Understanding Health Insurance: A Guide to Billing

As the costs of health care continue to increase exponentially, maintaining adequate medical insurance is essential. With so many types of health insurance policies available from multiple carriers, it's easy to become confused and overwhelmed trying to understand the different features and characteristics of each plan. By understanding the basics of health insurance billing and learning how to estimate your own cost for treatment, dealing with major medical issues and addressing your financial responsibilities will be less stressful and more efficient.

Co-Pays

• The fee you pay to your physician's office at the time of your appointment is called a co-pay. These fees comprise a portion of the actual cost of the visit, with the remaining balance paid by your health insurance carrier. Average co-pays range from $20 to $50. Many health insurance plans require a slightly higher co-pay for visits to specialists or other medical professionals.

Deductibles

• The deductible is a specific amount of money you must spend toward the cost of your medical treatment before the benefits of your health insurance plan become activated. Paying the deductible is entirely your responsibility, and the health insurance company remains uninvolved until that money has been paid. Only after your portion of the bill for services rendered is paid does the medical plan begin to provide relief. Health insurance policy deductibles often range from $1,000 to as high as $10,000.

Co-Insurance

• Co-insurance refers to the specific percentage split between you and the health insurance carrier regarding the cost of your treatment. Co-insurance splits are a division of financial responsibility, and are only calculated after your deductible has been satisfied. Common co-insurance figures range from 10 to 50 percent.

Maximum Out of Pocket

• To avoid the potential for personal economic crisis, health insurance plans contain provisions regarding maximum out-of-pocket amounts. These amounts are described in your policy as exact dollar amounts, and typically range from $1,000 to $10,000. If your own out-of-pocket treatment costs meet or exceed the figure listed in your policy, any future medical bills will be paid entirely by the insurance carrier.