October 30, 2009

Many of us are told from a relatively early age to read everything, including the fine print, before we sign it. Then we go out on our own into the world to the wonderful experience of having to get our own insurance for various necessities. Someone could have at least warned us how easily we could get lost trying to make heads or tails of our insurance policies!

Once you have tried and been able to retain at least some part of the pages of complex information, it is a good time to call a representative from your insurance company. They are the best people to contact when things just seem like words on a page. They have this uncanny ability to make those words comprehensible. So before going too far into the conversation, be sure to get their name. You may need them again some time.

Each insurance company has its own way for handling deductibles, or what is known as out-of-pocket expenses. These amounts are any amounts which your insurance company does not cover. Some examples could be items you must pay for first, before your insurance company reimburses the rest.

This is an important part of your policy which you need to be aware of to the greatest extent possible. Surprises when you or family members are ill are more stressful to deal with. There may be a co-pay or monthly premium as well. This amount could have to be paid before your insurance company pays all of your expenses. Normally this leaves you with only the monthly premiums to pay.

Let’s go into a bit more detail about deductibles, co-pays and premiums, as well as co-insurance.

  • Deductible – This is the amount of money you are required to pay before your insurance coverage begins. Normally the higher the deductible, the lower the premium will be. This is because the person holding the policy wishes to shoulder a larger portion of the medical expenses.
  • Co-insurance – This is an expense paid by the insured person as a percentage of your provider’s charge. If a plan has 70/30 co-insurance, you are required to pay for 30 percent of the covered service after meeting the deductible, but prior to reaching the maximum out-of-pocket level.
  • Co-payment – This is not the same as co-insurance. Co-payments are specific amounts you are required to pay at the time of any doctor’s visit. Regular scenarios have co-payments not being subject to the deductible. This simply means you don’t have to meet your deductible to be able to use this option. However, this also means this amount does not apply to your out-of-pocket amount.
  • Any out-of-pocket expense maximum or cap would be an amount you are required to meet in order for your insurance company to begin paying 100 percent of the benefits covered by your policy. Any out-of-pocket expense which may be applied to this amount can include deductibles as well as co-insurance.

    So as you can see, there is quite a bit of information which you need to be aware of when it comes down to the inner workings of your medical insurance. Remember that nice representative who helped you out with your questions earlier? Keep her name in a place you won’t lose it. Remember her every once in awhile and send her a Thank You note, or a picture of the family. She’s the one you want to keep turning to when things stop making sense, and you need a little refresher course.

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