A Basic Guide to How Medical Insurance Works
Jan 17, 2012
1) First you may have a “Yearly Deductible” that you are responsible to pay before your Primary Insurance company or Medicare pays anything at all. This amount is different for every insurance plan and can be $100, $500, $1,000 or whatever your insurance plan dictates. This deductible may not apply to all services. You must refer to your insurance plan description for specific plan details.
2) After you have paid the Yearly Deductible amount in full, then the insurance company pays a percentage of your medical bills. This can be 100%, 80%, 60%, or whatever your plan dictates. You, the patient, are responsible for paying whatever percent is not covered by your insurance. This is called your “Co-Insurance”.
3) You may also be required to pay a “Co-Payment” which can be in conjunction with your co-insurance or separate. This may be $10, $20, $25 or more for your office visit at the doctor’s office, on the day of your visit. This amount is dictated by your insurance plan.
4) If your insurance plan is a “Managed Care Plan” or “Health Maintenance Organization”, you will be required to obtain a referral form from your Primary Care Physician for a visit to a Specialist Physician. If you do not have a referral from your Primary Care Physician, you will be responsible for 100% of the Specialist Physician fees. Managed Care Plans and Health Maintenance Organizations generally require that you only see physicians that are participating in the plan. It is your responsibility to know your insurance company’s rules.
5) If you have what is called “Secondary Insurance”, this means that another insurance company may pay toward the deductible, co-insurance or co-payment after your first (or “Primary”) insurance company has made payment. This does not necessarily mean that you will not be responsible for a portion of the fees because some Secondary Insurance plans have their own Deductible, Co-Insurance or Co-Payment.
THIS EXPLANATION IS FOR INFORMATION PURPOSE ONLY AND NOT INTENDED TO REFLECT ALL SITUATIONS. BECAUSE INSURANCE PLANS VARY, YOU MUST READ YOUR OWN PARTICULAR INSURANCE PLAN, TALK TO YOUR EMPLOYER (IF YOUR INSURANCE PLAN IS THROUGH YOUR WORKPLACE), OR TALK TO YOUR INDIVIDUAL INSURANCE AGENT OR COMPANY FOR YOUR COMPLETE POLICY DETAILS.