A co-what? A deductible who?

Friday, October 22, 2010

Photo: Courtesy of jscreationzs

The world of health care includes a lot of different payments, fees, and word jumble. Many health plans are so complex that people don’t even know what costs they are paying. This is an important fact to consider for everyone. It is essential when choosing your first health plan to know what the terms mean. However, for those who are evaluating a current health plan or looking for new options, these costs can make a difference. When looking at overall health care costs, it is important to know what each of the key terms mean and what they do. The four most commonly used terms that are essential to know are:

  • Co-pay
  • Deductible
  • Premium
  • Co-insurance

The Bureau of Labor Statistics gives a great definition of these critical terms as well as other important terms to know and consider when evaluating or choosing a coverage plan. While all plans include a premium, which is the fee paid (monthly, quarterly, yearly etc.) for coverage of medical benefits for a certain period; many have different options for the other fees. A deductible, which is commonly a fixed amount, is the portion of an insurance claim that is not covered by the insurance provider. Similarly, a co-insurance is sometimes another factor of a plan that is the amount you would have to pay after the previous three. For example, after the premium, co-pay, and deductible are paid, if a medical insurer covers 80% of medical costs, you would pay 20% of whatever medical costs you had.

 Co-pay is usually what you pay for an office visit to something such as a doctor’s office. For example, a UNH faculty or staff member under the University Systems health care plan at UNH would typically pay a $10 co-pay for an office visit in New Hampshire. On the other hand, a student under the UNH health insurance plan would usually pay a $25 co-pay for an office visit. This difference in cost demonstrates the fact that depending on the individual, the provider, and the health care company, most co-pays and other costs will vary. As a result, this makes the idea of understanding costs essential to evaluating a health plan. Considering what the different costs are can have a major impact on how much you pay for a health plan. It is important to know the difference in these terms when evaluating a plan and your own health costs. Many plans are different and it can make a major difference in what you pay at the end of the day. 

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