Health care plans are designed to cover some or all of the costs associated with services, prescriptions, immunizations, annual preventative care and exams, hospital care, psychiatric care, and medical equipment.
The benefits that are associated with the health insurance plan you select (or plans you are selecting from) can be found in the plan’s Summary Plan Description (SPD). This is important information as it provides critical information about what services and health insurance benefits are offered, deductibles, copayments, coinsurances, and out-of-pocket maximums.
Annual deductibles are reflected as either individual/employee or 2+ covered individuals. For instance, a plan may have an annual deductible as follows:
- $1,000 for employee-only/individual coverage.
- $2,000 for two or more covered people.
In this scenario, there will be benefits that the carrier will only start to cover once the deductible is met. For instance, John Doe is the insured and he has family coverage. His plan has an 80/20 coinsurance for office visits and diagnostic tests (thus he is responsible for 20% of the cost) once he pays $1,000. He falls off a ladder and goes to his doctor. The cost of the doctor visit, x-rays, ultrasound, and crutches is $1,800. John would be responsible for paying the first $1,000 and then 20% of the remainder of the costs (including future medical services). He would not have to pay towards the deductible for the remainder of the year unless another member of his family used the services.
The annual out-of-pocket expenses maximum is the maximum amount that the insured will have to pay in the plan year once they hit the designated amount. It is important to understand what is and isn’t included in the calculation. These maximums are usually reflected as the annual deductibles (individual and two or more), but when the insured can use services and healthcare professionals outside of the plan’s network, will also distinguish the maximum based upon in network and out-of-network. For instance:
- $6,350 for employee only/individual coverage
- $12,700 for two or more covered people
- $12,700 for employee only/individual coverage
- $25,400 for two or more covered people
As you can see, just as with obtaining services outside of the network tends to result in higher copayments and coinsurance, it also increases the maximum you will be required to reach. Thus, an important reason to review your plan’s network and select healthcare providers, groups and hospitals that are in the plan’s network.
The Basic Medical Care services include such things as doctor office visits, eye exams, hearing exams, diagnostic tests, x-rays, procedures, maternity, newborn care, hospital care (inpatient and outpatient), surgery, and emergency room. These are usually broken into hospital and non-hospital services and benefits, often also having different copayments and coinsurances. Depending on your plan, it is important to carefully review all of the potential costs for these services, including whether or not the services are subject to the deductible.
When it comes to basic medical care, there are services known as wellness care benefits. These are benefits that are covered 100% by the carrier, thus no out of pocket expense to the insured (including no deductible). These benefits are based upon the federal guidelines for providing coverage for preventative care and immunizations. These benefits include:
- Preventative care (such as annual check-ups, well baby care, etc.)
- Immunizations and inoculations
- Annual monograms
- Colonoscopy screening every 5 years
- Medically supervised weight loss programs (usually subject to specified terms and limitations)
- Nutritional counseling (usually subject to specified terms and limitations)
- Smoking cessation drugs (usually subject to specified terms and limitations)
Mental health and substance abuse services are those designated for counseling and treatment of mental health, psychological and psychiatric diseases and problems. These are commonly broken into two parts, inpatient benefits and outpatient benefits. When reviewing these services, it is also important to understand the maximum annual treatment visits each covered individual can use under the coverage.
Prescription drugs is often a very significant part of healthcare insurance for individuals and families. This refers to medications that are prescribed by your healthcare professional. Many medications are very expensive and in many cases, not affordable. Thus, insurance can be a very welcome benefit. Prescription plans are generally broken down in two areas including they type of medication and the amount being received.
There are some medications that are subject to a patent allowing only one pharmaceutical company to make and sell it and other that multiple pharmaceutical companies make. This leads to the two types of medications sold…generic and brand.
When it comes to health insurance, it is not uncommon to see the types expanded to:
1. Generic (typically the lowest cost to the insured)
2. Preferred Brand (non-generic; usually more expensive than generic, but since identified by the insurance carrier as a preferred-brand, is usually less than non-preferred brands)
3. Non-Preferred Brand (except for specialty drugs, these are usually the most expensive cost to the insured)
4. Specialty Drugs (these are those that require special handling, administration and/or monitoring; these usually carry a significant cost to the insured)