What is a deductible?
The deductible is the amount that you are responsible for before
the insurance company begins paying anything, for example: if you have a $500
deductible you are responsible for the first $500 of bills per person in that
year before the company begins paying claims. Some plans may have a
special doctor visit co-pay or co-insurance where the deductible wouldn't apply
for doctor visits, you would simply pay what ever the co-pay or co-insurance was
and not worry about the deductible. Most plans have a "family deductible
limit" which is usually the total of 3 deductibles in a year. Basically
what this means is you will only ever have to pay a maximum of three deductibles
in a year so as an example if you have a family of six people and you are all
together in the car and get in an accident you will not have to meet six
separate deductible, you would max out at three.
What is a co-insurance?
The co-insurance is the percentage that you will pay once the
deductible is met. For example: if you have an 80/20 co-insurance once you
have met your deductible you would pay 20% of the bill and the insurance company
would pay 80%. Most plans have an "out-of-pocket-maximum" on the
co-insurance which means the co-insurance stops at a certain point. For
example: if it says it's an 80/20 co-insurance to $5,000, it simply means that
you will pay 20% of the next $5,000 worth of bills and the company would pay 80%
In this case your maximum out of pocket on your co-insurance in a given year
would be $1,000. If you had a $500 deductible with the co-insurance 80/20
to $5,000 your TOTAL maximum out of pocket expenses for a given year would be
$1,500 per person.
What is a co-pay?
Some plans offer what is called a doctor "co-pay". This is simply a
flat amount that you would pay for a doctor visit instead of having to worry
about meeting your deductible first. For example if you have a $25 doctor
visit co-pay you would only pay $25 for the visit and the company would pay for
the rest of the bill. Some companies such as Wellmark Blue Cross Blue
Shield use the co-insurance instead of a co-pay for doctor visits so instead of
paying a flat amount for the doctor visit you would pay 20% or 10% depending on
if your co-insurance was an 80/20 or 90/10.
So how do these all work together?
To recap; first you must meet your deductible in a given year, once the
deductible is met you will go into the co-insurance where the insurance company
will pay a percentage of the bill and you will be responsible for the remainder
until you reach a specified dollar amount. Once the co-insurance has been
met the insurance company will then kick in 100% up to the lifetime maximum
amount of the policy. Remember some plans have a doctor visit co-pay where
you would only have to pay a flat amount for a doctor visit without having to
worry about the deductible or co-insurance, or as mentioned before with Wellmark
you would just pay 10 or 20 percent as opposed to a flat doctor visit co-pay.
What is an exclusion rider?
An exclusion amendment rider is something the health insurance
company attaches to a policy specifically excluding a certain pre-existing
condition such as high blood pressure or diabetes. These riders can be for
a specific length of time such as 2 years or can be indefinite. One thing
to consider with exclusion riders is the fact that the exclusion may involve a
broader range of conditions than one would think, hypertension for instance will
result in an exclusion of any claims involving the circulatory system meaning
heart attacks, strokes, and bypass surgery would all be excluded under the
hypertension exclusion rider. For people that receive exclusion riders we
suggest considering the HIPIOWA Iowa Comprehensive Plans that would not exclude
any conditions, you can find plan information and premium rates at
http://www.iowahealthinsurance.biz/hipiowa.htm.
If I receive a rider or am declined by a
company should I try to apply with another one?
It's been our experience that the underwriting is pretty similar
across the board through out the different companies, if one company is going to
decline or rider a condition then the others most likely would as well.
One situation where we have found a difference however is with people under the
age of 40 with high blood pressure. In this situation Wellmark will
decline an application where the other companies will accept the application but
place an exclusion rider on the condition. Again in this situation we
recommend considering the HIPIOWA plans instead.
What is a PPO?
A PPO stands for "Preferred Provider Organization" and is what
the majority of health insurance plans are today. A PPO plan requires you
to use certain doctors and hospitals that are in the "network" that your health
insurance company uses in order to receive full benefits. You still have
coverage if you go outside of the network for treatment but the coverage is
reduced. Many times your coinsurance will drop from say an 80/20 down to a
60/40 and you may be required to meet a separate deductible for out of network
treatment. One more thing to remember is that an emergency situation where
you are unable to prescreen who is in the network will usually be treated as in
network.
Hopefully this helps clarify the different components of
a health insurance policy and how health insurance plans work in general.
As always if you still have questions you are more than welcome to call or
email an agent or
(866) 820-1739
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