Healthcare Speak Decoded, AKA “What am I paying for?”
It’s easy to get lost in the complicated world of American healthcare. I mean, there’s a reason that there are health insurance professionals called Navigators, right? Whether you’re backpacking around the world or choosing a new health insurance plan, keep that famous Boy Scout motto in mind: be prepared.
Anatomy of an Insurance Plan
Premium, AKA your monthly payment: Think of this as pre-paying for medical care – you’re basically making payments toward a medical event at some point in the future. This is what you pay every month (usually out of your paycheck if you have insurance through your employer). It’s just like your gym membership or your car payment – you pay every month to participate in the plan. The downside here is that even if you don’t go to the doctor, you’re still paying every month like clockwork.
Deductible, AKA how much you pay before insurance kicks in: How much you have to pay out-of-pocket before your insurance benefits start covering costs. Deductibles and premiums usually counterbalance each other. If you have a low premium, you usually have a higher deductible, and vice versa. The difference is whether you pay for that episode of care all at once (the deductible), or if you’ve been making monthly payments (the premium).
Copay and Coinsurance, AKA your share of the bill: More out-of-pocket costs. This is called “cost-sharing,” which is industry-speak that means you and your insurance company are going dutch on your bill (just like going dutch on the dinner bill but without the leftovers and you don’t have to impress your insurer with small talk). Your copay is a set fee that you pay every time you go to the doctor. Have you ever had to shell out $25 up-front when you check in for your doctor’s appointment? That’s a copay. Coinsurance is similar, except you pay a set percentage of the total cost for that procedure – which, of course, makes coinsurance payments harder to estimate beforehand.
Provider, AKA your body’s mechanic: An all-inclusive word describing whoever is providing your care – doctors, nurse practitioners, physical therapists, etc.
Provider Network, AKA Get yourself repaired and tuned up at these participating locations: This is SO IMPORTANT that it gets gratuitous capitalization for emphasis. Almost all insurance plans have a network of providers the payer has contracted with, so if you see those providers, your benefits apply. If you go outside the network, you may have to pay a greater percentage, a higher copay, or you may not be covered at all. Be sure you understand the limits of your provider network before you make your appointments!
Now you know the lingo you need to decipher those insurance plans and pick the best plan for you. Check out part two of Your Healthcare Field Guide, where we’ll walk you through the most popular plan designs and the pros and cons of each.
Cash-Pay: When Insurance Isn’t Picking up the Bill
Cash-pay, self-pay, out-of-pocket: there are a lot of ways to say that you’re paying for your care yourself, without filing a claim to an insurance company. There are lots of reasons you might be picking up your own medical bills. Maybe you have a high deductible plan and you haven’t met your deductible yet. Or maybe you don’t have insurance. Maybe you can get a better price if you pay out-of-pocket than going through your insurance.
Don’t let having to pay out-of-pocket scare you away from getting the healthcare you need. Many times, practices offer a different rate to cash-pay patients than those with insurance. Don’t be afraid to ask!
Insurance claim adjudication is a long, tedious process that requires a lot of administration. In many cases, it can take anywhere from 30 to 90 days for a provider to be reimbursed for a service – unless the claim is denied. Simply put, many providers are willing to work out a deal with cash-pay patients because getting paid less is usually better than finding out three months later that you aren’t getting paid at all.
P.S. Cash-pay doesn’t mean you have to pay with paper money. Most places will quite happily accept check or credit card, too.
If you’re looking at the cash-pay route, check out the MDsave marketplace at www.MDsave.com to see what the going rates are for procedures in your area. If you want, you can even buy your service up-front through the marketplace. Take a look! See what deals you can find.
MDsave: Out-of-Pocket, Easy as 1-2-3
You can use MDsave regardless of insurance coverage (or lack thereof) to find the best quality and prices in your area on out-of-pocket services. You can even use your HSA/FSA/HRA to pay for your procedure!
Here’s how it works:
- Search the MDsave marketplace by your procedure and ZIP code.
- Compare prices and providers near you.
- Pay one up-front, fully bundled price so you’ll never receive a surprise bill in the mail.
After your payment, you’ll receive a voucher for your service and your physician’s office will call to schedule your appointment. No insurance cards to pull out, no copay or coinsurance, the bill is taken care of before you walk in the door. Easy, right?