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Now small bills basically refers to everything up
to your maximum-out-of-pocket (see
Section 3 - Big Bills). There are
different ways each plan handles these expenses so
lets explore them and more importantly...their
costs to you.
Up
to your maximum, each plan handles smaller bills
in one of three ways. By small bills, we
mean everything from your doctor visit charge to
minor surgery...essentially what falls below your
maximum (because it goes 100% after that
anyway!!). Let's first understand what these
terms are, and then really understand how much it
costs to have the bells and whistles.
Deductibles,
Copays, Co-insurance.
A deductible is an amount that you will pay
100% of before the plan starts to pay. Think
of if as a pool of money. Once you have
spent your pool of money out of your pocket, the
insurance then starts to kick in. This
amount is usually in a calendar year,
January-December. Sometimes there are
separate deductibles for specific care such as
maternity. Now remember, if you are
in-network i.e. you are Unicare and the doctor
is a Unicare doctor, then you will get 30-60%
off because of the negotiated rates. Let's
look at an example...
Doctor
visit is $100. Because you are Unicare PPO and doctor is
Unicare PPO, then this charge
may drop to $60. You pay this $60 and it
applies to your deductible.
This negotiated rate is a great benefit even
before you have met your total deductible. Now out
in the market today, they primarily have what's
called a high deductible plan (from around
$1,000 to $3,000) which is for the person who is
really worried about the big what-if and wants to
keep their monthly premiums down. A great
example of this is the
MSA
plan which has special tax advantages for the
self-employed and small group.
A Copay is simply an amount you pay for a
given service. For example, a $40 copay
usually means you will pay $40 for the doctor
consultation. Keep in mind that additional
services, i.e. labs, x-rays, etc...will have
additional costs. Sometimes there are copays
on specific services. For example, ambulance
or emergency room visit might have a copay.
Co-insurance
refers to a percentage you will pick up for
services. For example, a 30% plan means that
you will pay 30% (insurance will pay 70%) of the
negotiated rate.
For
example on a 30% plan:
minor
surgery
$1,000
negotiated rate
$ 700
30% coinsurance
$ 210
(30% of $700)
In
this case, in-network for a covered benefit, you
would pay $210.
These are essentially the three ways an insurance
plan handles the smaller bills.
deductible
You pay 100% up to a certain amount
co-insurance You pay a percentage up to a
certain amount
copay You pay a fixed amount for a certain
service
That "certain amount" above is typically
your maximum out of pocket.
Now that we know how a plan handles the small
bills, let's understand what it will costs us.
Obviously the co-insurance in nice because you
have "first dollar" coverage meaning the
insurance company will help pay with your first
bill. That being said...you don't think they
will do it for free do you? This is
critical. Let's look at an example.
35 yr old, Harris County, good health
$2,250 Deductible PPO plan
$85/month
30% PPO plan
$219/month
Now with the first plan, you have to meet a $2,250
deductible...translation, this is mainly for the
big bill. You'll get negotiated rates but
all the small stuff will fall on your shoulders.
Now the other plan will start paying 70% from your
first bill...very nice right?? But wait a
minute...we are paying an extra $134/month for
that first bill coverage. They both handle
the big bill about the same (max is about the
same). $134/month is $1,608 per year!!
That almost makes up for the deductible amount in
one year!!
Paying a guaranteed $1,608 a year to save a
potential $2,250 per year is not good insurance
and you would need a lot of small bills to make it
worth $1,608. Remember, you want to pay
pennies on the dollar...not pennies on the
nickel. Paying $85/month to protect
against a $20,000 surgery is smart
insurance...pennies on the dollar.
Now for those people that absolutely want
first-dollar coverage...great...you can have it.
Just keep in mind the above example. Also,
over the last three years health insurance has
been hit by significant rate increases.
Guess where they typically hit
hardest...Co-insurance and HMO's.
Now that we feel pretty good about the doctors,
big bill and small bill coverage let's look at
prescriptions. With brand name prices
increasing 20% a year recently, it is important to
see how a plan handles this....Next
Page - RX
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