It can be challenging when trying to determine annual health care costs. There are various things that impact the cost, such as premiums, deductibles, coinsurance, and copays. An explanation of these terms commonly used in health insurance is outlined below. Customers should review their Summary of Benefits and Coverage. This is helpful in understanding the covered services and out-of-pocket costs associated with your specific plan.
Premiums
A premium is a regular payment that is often due on a monthly basis. The payment is sent to the provider, such as Aetna, in order to maintain an active plan. In general, a higher premium is typically associated with a lower deductible for services.
Deductible
The deductible is a set amount that individuals will be responsible for paying annually on medications or services. Once the customer meets their deductible, the plan begins to help cover the cost of services that are covered. If an individual has a $3,000 annual deductible, they will be responsible for paying the first $3,000. Once this amount has been met, the plan will start to help pay for the covered services.
A deductible is different from the plan’s monthly premium. After the deductible is met, the plan assists with covered costs. An individual is still required to pay for their monthly premium in order to maintain their plan.
In cases where the patient is generally healthy and does not expect needing costly medical or dental services, they may benefit from a plan with a lower premium and higher deductible. In comparison, patients with serious medical conditions or those who anticipate needing costly medical or dental services are better suited with a plan that has a higher premium and lower deductible. These plans help pay for a larger portion of the overall costs and are beneficial for patients with greater medical needs or complex health issues.
Coinsurance
Coinsurance is a portion of the medical cost that is covered after customers meet their deductible. Coinsurance works by sharing the eligible costs between patients and their insurance provider. When a plan has a higher coinsurance percentage, the individual is responsible for a larger portion of the cost for services. Patients are also responsible for any charges outside of the plan.
Copay
A copay or copayment is a flat fee that individuals are responsible for when obtaining a prescription or visiting a provider. The copay is due at the time of service. It is also possible for patients to have a copay for prescription medications. The patient’s copay is usually listed on their insurance ID card and indicates the amount the individual is responsible for. This preset rate is based on the specific insurance plan.
Not all patients have a copay, and it will vary based on their plan. Some plans use a combination of a deductible and copay or coinsurance. In other cases, the plan covers the cost associated with specific services. Things such as preventative care, annual exams, and routine cleanings are often included in dental insurance.
Contact the office today to discuss any questions regarding the services we offer and associated costs. It is important for patients to understand how premiums, deductibles, coinsurance, and copays work in order to determine their health care costs. The team looks forward to speaking with you to help answer questions regarding your dental insurance coverage.