Health insurance terms can be confusing. Copay, coinsurance, deductible, out-of-pocket maximum – what do they all mean? Here is a quick and easy guide to help you understand the language of health care insurance.
A copay is the fixed amount you, the patient, pays for a covered health care service. The amount of the copay depends on the service provided. Doctor’s visits, prescription drugs, imaging, specialists and trips to the emergency room may all have different copays.
Coinsurance, like a copay, is another form of cost sharing. Unlike copays, which are flat fees, coinsurance is a percentage of the cost for a health service or prescription drug paid by a patient after reaching his or her deductible.
With coinsurance, you pay a percentage of the cost of a healthcare service (after the deductible has been met).
For example: You have met your deductible for the year and you are scheduled for a procedure that costs $1000. If your coinsurance is 20%, you will be responsible for $200.
You only have to continue paying coinsurance until you've met your plan's maximum out-of-pocket for the year. After you have met your deductible, your health insurance company pays the rest of the cost.
The amount you pay for covered health services before your insurance plan starts to pay. If your plan’s deductible is $2000, you will pay 100% of eligible health care expenses until your bills total $2000. Once your deductible is met, you share the cost with your plan by paying coinsurance.
Important to remember -- many insurance plans pay for preventive services, such as annual checkups or disease management programs – even before you have met your deductible.
After a patient has paid a certain amount of medical expenses, the usual, customary and reasonable (allowed) fee for covered benefits is paid in full by the insurer.
For example: Your insurance plan has a yearly out-of-pocket maximum of $2,500. You’ve already met your $1,000 deductible and have paid an additional $1,500 in copays and insurance. Your insurance plan will now cover 100% of any covered benefits until your policy renews the following year.
BILLED CHARGE VS. ALLOWABLE CHARGE
Billed charge is the amount charged by the provider for a service.
Allowable charge is the contracted amount your insurance plan will pay for a covered health care service. You almost never pay a billed charge.
However, be aware that if you choose an out-of-network provider, you may be responsible for the difference between the billed and allowable charges.
Some medical services require your insurance company’s approval before you receive care. This approval process is called preauthorization (also known as prior approval, prior authorization or precertification).
To ensure coverage, always contact your insurance company before any services are performed to see if preauthorization is required.
INSURANCE PLANS ACCEPTED BY WASHINGTON UNIVERSITY PHYSICIANS
All of the full-time faculty physicians of Washington University School of Medicine participate in the health insurance plans listed below. However, there are private companies who change coverage and products periodically and it is always best for you to check your own specific plan before you make an appointment. It is the patient's responsibility to pay his or her medical costs.
All Health Insurance Plans and Networks
Health Exchange Market plans - Affordable Care Act (ACA)
Medicare Government and Private Providers NOTE: Washington University Adult Primary Care Physicians (PCP) do not participate in the Medicare Advantage Plans marked with an asterisk (*). If an Adult PCP selection is important for your Medicare Advantage Plan decision, please confirm with your Primary Care Physician office of his/her participation before enrolling.
Medicaid Government and Private Providers
Hospital plans and coverage may differ from the doctors’ plans. If you are planning to be an inpatient at one of our affiliated hospitals or receive imaging or other testing associated with the hospitals, please check your coverage before your appointment.