Unit two lesson three health insurance cost terms

Premiums

-keep insurance active

-depend on plan, coverage level, age, and location

Copayment or co-pay

• fixed amount

• paid at time of service

• DOES NOT count toward deductible

• DOES count toward maximum out-of-pocket

Deductible

-amount patient pays before insurance pays

-reset annually

-after meeting deductible then the co-pay and coinsurance is paid

Coinsurance

-% of bill patient pays after meeting their deductible

-applies after patient's deductible is met

EX: 80/20 80% ins and 20% patient

out of pocket maximum

• the most do you have to pay for healthcare services in a year

• stop-loss maximum

deductible versus out-of-pocket maximum

• Amount paid before insurance pays is deductible

• Maximum amount paid before insurance pays 100% of costs

Contractual Adjustment (WRITE OFF)

• DIFFERENCE BETWEEN WHAT PROVIDER CHARGES AND WHAT INSURANCE COMPANY ALLOWS

• ALLOWED AMT

• ALLOWABLE AMT

• CONTRACTED AMOUNT

Total patient responsibility

• Co-pay + deductible + coinsurance

Five steps in calculating total patient responsibility

1. make contractual agreement

2. add copay + deductible (patient responsiblity so far)

3. Subtract “patient responsiblity so far” from allowed amt

4. apply coinsurance to remaining amt

   1. add “patient responsibility and co insurance amt

1. copay + deductible

2. (copay + deductible) - allowed amt

3. add to coinsurance

4. add patient responsibility