Heath Insurance 101, for those who have.

For my nursing school people, basic health insurance components/jargon demystified. Also, I wrote you a vocab list and a little story, too. ❤

Premium: monthly cost (often split between individual and employer OR fed gov’t subsidy (ACA Healthcare Marketplace, Medicare) OR state gov’t (Medicaid).

Copay: Set amount of $ you have to pay to see a doc/receive a service.

Coinsurince: % of bill you owe.

Deductible: $ you pay before insurance kicks in (depending on plan, you may have to meet a deductible before insurance will cover anything, or before your insurance will cover specific services, or you may not have a deductible at all).

Out of pocket max: The most $ you’ll have to pay in 1 year (insurance agrees to cover all expenses after it’s met).

Formulary: list of Rx drugs covered by your insurance usually split into “tiers” that determine how much you pay. Tier 1=generics, cheapies, 2=expensive generics, brand names, 3=expensive brand names, 4=specialty or brand new (crazy expensive).

Provider network: “In network”=hospitals, health systems, and doctors your insurance has bargained with for lower prices. HMO/EPO insurance will not pay anything towards care out-of-network. PPO pays much less for out-of-network.

Referral: Required by some insurance plans, a referral comes from your primary care doctor and recommends that you see a specialist.

Re-enrollment: period of time when you must sign up for a new insurance plan or verify that you are sticking with your current plan. Happens yearly, often in late November.

STORYTIME
You’re biking in the school arboretum which you weren’t even supposed be doing in the first place and you fall and break your arm. But, intelligent child that you are you’ve remembered to sign up for health insurance and pay your $200 a month premium so this injury won’t sink your financial battleship. You go to the ED at an in-network hospital and pay a $100 copay at registration. You have x-rays and get a soft cast and the doc gives you 2 Percocet and an Rx for some Percocet for the road. You fill your Rx at the pharmacy and lucky you Percocet comes in generic and is on tier 1 of the formulary so you’re only out $7 for the pills. Man you sleep like a baby. Your health insurance plan doesn’t require a referral from your primary care doc so first thing in the morning you go to the orthopedist and pay your $35 specialist copay as you register. The doc examines your arm, puts on a hard cast and says see ya in 6 weeks.

Four weeks later you’re scratching your arm with a coat hanger and the bills are rolling in. You have a $200 deductible for physicians’ services, diagnostics, or treatments, so you have to pay the full $200 bill for the Emergency Services Physician’s Group (this pays your ED doc for his time). That satisfies your deductible. Bills from the hospital system arrive and you pay a 20% coinsurance on the x-rays, the soft cast, and the meds they gave you in the hospital. Next comes the bill from the private practice orthopedist who bless his heart is also in-network. You pay 20% coinsurance on the amount he charged for setting and casting your arm.

You’ve paid about $500 towards your out-of-pocket maximum for the year. If you’re going to have a catastrophic injury or illness, it would be cheapest for you to do it now and not wait for re-enrollment to come around!

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