Understanding some essential terms can greatly assist you in asking pertinent questions, leading to more productive discussions with your healthcare providers, and potentially reducing your out-of-pocket expenses. While this guide aims to be informative, it is always advisable to be familiar with the specifics of your own insurance plan.
DEDUCTIBLE
The deductible is the amount you must pay out of pocket each year before your insurance starts covering expenses. Usually, deductibles reset at the beginning of the calendar year and may not apply to all services.
Example: If your deductible is $2,000, you are responsible for paying the first $2,000 of your medical expenses. After that, your insurance will cover a portion of your medical costs, but you may still need to pay a share through copays and coinsurance.
CO-PAY
A co-pay is a fixed amount you need to pay for certain medical services at the time of receiving the service. Commonly, office visits and prescription medications require copayments.
Example: A visit to your family doctor might require a $25 copay, while an emergency room visit could involve a higher copay. Some services may require both a copay and coinsurance.
CO-INSURANCE
Co-insurance kicks in after you've met your deductible, and your insurance starts covering a portion of the costs. It represents the percentage of the total cost that you are responsible for paying after your insurance has contributed its share. Unlike a fixed dollar amount, co-insurance is calculated as a percentage of the total cost.
Example: Let's say your deductible has been met for the year, and the cost of your next doctor's visit is $100. If your co-insurance rate is 20%, you will pay $20, and your insurance plan will cover the remaining $80.
OUT-OF-POCKET MAXIMUM
The out-of-pocket maximum is the maximum amount you can pay for medical services within a specific period, typically per year. Once you reach your out-of-pocket maximum, your insurance plan will cover 100% of all allowed charges.
Example: If your insurance plan has a $4,000 out-of-pocket maximum and you have already paid $2,000 in deductibles, copays, and coinsurance, your insurance will now cover all allowed medical charges until your policy renews the following year.
ALLOWABLE VS. BILLED CHARGES
The allowable charge is the price that your insurance company will pay for a particular medical service. It also determines how much you need to pay in coinsurance, copayments, or deductibles. The billed charge, on the other hand, is usually higher than the allowable charge. Whether a provider is in-network or out-of-network with your insurance company determines who is responsible for paying the difference between the allowable and billed amounts. If the provider is out-of-network, you might be charged that balance, which can be a significant amount.
IN-NETWORK VS. OUT-OF-NETWORK PROVIDERS
In-network providers are clinics and physicians that have agreed to charge discounted rates to your insurance company for medical services. They are also referred to as "preferred providers." Choosing in-network providers can result in lower costs for you, as you may pay less out of pocket. In contrast, out-of-network providers may charge higher rates, and you could be responsible for covering the difference between the allowed amount and the provider's billed amount.
PREAUTHORIZATION (PRIOR APPROVAL OR PRECERTIFICATION)
Certain medical procedures and medications require preauthorization from your insurance company before they will be covered. If preauthorization is necessary but not obtained, your insurance plan may deny coverage for the cost. However, even with preauthorization, there is no absolute guarantee of coverage, so it's essential to contact your insurance before proceeding with a treatment or procedure to ensure coverage.
If you are having surgery, several potential charges may occur:
SURGEON'S FEE
The surgeon's office can provide you with an estimate of the fees, which are based on charges. However, VENT has special contracted rates with most insurance carriers, resulting in adjusted charges known as "allowable rates."
SURGERY CENTER:
The surgery center will have separate fees, and your surgery scheduler will give you the name and phone number of the center to inquire about estimated charges directly. In most cases, VENT uses in-network surgery centers.
HOSPITALS:
Your surgery may be scheduled at a hospital, and your surgery scheduler will provide you with the hospital's name and phone number. It's recommended to contact the hospital in advance to discuss insurance coverage.
RADIOLOGIST:
In some cases, the involvement of a radiologist may result in additional charges for tests or interpretations.
ANESTHESIA:
Anesthesia will be required for your surgery, and the surgery scheduler will provide you with the name and contact number of the anesthesia service. It is advised to call them to review your insurance coverage and their charges.
OTHER SERVICES:
Other services might be necessary, but specific costs may vary depending on your surgery and individual insurance plan. While each VENT office has a surgery contact person to assist you, it's essential to understand that surgical procedures and insurance plans can differ, making it difficult to provide exact and final amounts ahead of time.
