How major medical insurance pays

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Defining basic terms that are common to health insurance.

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How major medical insurance pays

  1. 1. How Major Medical Insurance Pays.<br />Terms to know when shopping for health insurance.<br />
  2. 2. Deductible<br />The insured agrees to pay 100% of medical bills up to this amount before the insurance company has any responsibilities.<br />
  3. 3. Co-Insurance<br />A co-insurance requires<br />the insured to share a percentage of the costs of covered services after paying 100% of a deductible if present. It is often expressed as a ratio with the insurance company paying the greater percent.<br />A co-insurance can be expressed as 80:20. <br />This is saying that the insurance company will<br />pay 80% of medical costs after the deductible<br />has been paid by the insured. The insured will<br />pay the remaining 20%.<br />90:10, 80:20, 70:30, 60:40 and 50:50 are common<br />co-insurance plans. The lower the first number,<br />the lower premium is required.<br />
  4. 4. Maximum Out of Pocket<br />Sometimes called an OOP, this is a limit to the amount of money the insured is required to pay for medical care before the insurance company pays 100% of medical costs for the rest of the policy term.<br />
  5. 5. Co-Pay<br />Typically, a nominal payment owed to a medical provider for routine treatment or consultation. It is not subject to the policy deductible. While they pay for medical treatment without regard to the policy’s deductible or co-insurance, they do not count towards fulfillment of deductible or co-insurance requirements.<br />The amount paid in the form of a co-pay do not pay for the entire treatment or consultation. The doctor will bill the insurance company for more money.<br />
  6. 6. High Deductible Health Plan<br />Also known as Consumer Driven Plans (CDP), High Deductible Health Plans (HDHP) are plans with a minimum deductible of $1,200 for self-only coverage and $2,400 for self-and-family coverage. They are often used in combination with tax favored Health Savings Accounts (HSA). They are used primarily to protect the insured from exorbitantly crippling medical bills in the event of an accident, disease or surgery.<br />
  7. 7. Health Spending Account<br />Used in combination with a High Deductible Health Plan the Health Spending Account is a tax favored savings account used to pay for medical care that is not paid for with health insurance.<br />Details about HSA plan can be found in IRS publication 969.<br />
  8. 8. The Insurance Barn<br />Tim Barnes, CLU<br />Richmond, Texas<br />www.theinsurancebarn.com<br />(832) 767-8059<br />

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