A survey showed that just 14 percent of insured people understood deductibles, copayments and coinsurance, explain George Loewenstein, PhD, and Saurabh Bhargava, PhD, both economics professors at Carnegie Mellon University. This is unfortunate because understanding the four parts of a health insurance quote can help people avoid financial burdens from health expenses.
Someone without a strong understanding of quotes could have difficulty from paying high amounts of money on insurance and healthcare. Heather Yates, a nurse practitioner in Kentucky, went from paying a monthly premium of $400 for a plan with a $1,500 deductible to paying a monthly premium of $1,000 for a $6,000 deductible plan. Even though her recent quote cost more upfront, Yates signed up because the new policy covered all expenses after the deductible.
In most quotes, there are four main components affecting the price: premium, deductible, copayments, and coinsurance. Premiums are the bill paid each month to keep a health insurance plan. The deductible is an amount the insured will pay out of pocket. After the deductible is when most insurance companies begin covering care. Copayments are flat fee amounts paid by the insured for health services, such as doctor’s visits. For example, a plan’s copayment could be $35 to visit a primary care physician. Coinsurance, unlike copay, is a percentage of the cost. For example, a plan might pay 70 percent of care while the insured pays the other 30. If your plan has a $100 deductible and 30 percent co-insurance and you use $1,000 in services, you’ll pay the $100 plus 30 percent of the remaining $900, up to your out-of-pocket maximum.
Knowing these essential parts of a health insurance quote can help people choose a fitting plan for their needs while saving money.