Understanding Health Insurance

How Well do You Understand Health Insurance?

A recent study evaluated how well Americans think they understand health insurance vs. how well they actually understand health insurance.

It turns out that although about three-quarters of people surveyed believe they know how to use their health insurance, only about 20 percent could correctly calculate the amount they would owe for a doctor’s visit.

In addition, many did not understand key terms like “HMO,” “PPO,” “out-of-pocket costs,”  etc.

It also turns out that people’s level of understanding varies based on things like their age, income level, education level, and frequency with which they use health care services. Not surprisingly, occasional users of health care services are the most likely to think they know more about health insurance than they actually do.

Test Your Health Insurance Knowledge

Here is a question asked in the study:  Can you figure out how much Robert would pay for an in-network doctor’s visit to have a wart removed from his foot?  The facts are:

• It is early January (meaning Robert has not yet met his deductible).
• The bill is $530 (the in-network rate for this service).
• Robert’s co-pay is $30 and his coinsurance is 20%.  His deductible is $100.  His co-pay does NOT count toward his deductible.

Is the answer:  A) $130, B) $210, or C) $236?

If you said B) $210, congratulations!  You are among the 20% who answered correctly.

Here’s how you get there:

• Subtract the deductible and co-pay from the total charge $530-$100-$30 = $400
• Compute the coinsurance: 20% of $400 = $80
• Total the deductible + co-pay + coinsurance:  $100 + $30 + $80 = $210

 Source:  American Institutes for Research

How to Choose a Health Plan —  Knowledge = Power

No matter how much you think you know, when it comes to choosing a health insurance plan, knowledge is power.  The more you understand, the better.  Here is a checklist to help you consider important factors when choosing coverage:

1	As you’re considering various plans, read each one’s summary of benefits and coverage. As you’re doing so, think about the medical services you and your family typically need and make sure those services are covered.
2	Make sure you understand the terms used in the plan’s documents. Click here for a glossary of terms. Contact us if you have any questions.
3	Carefully study the tradeoff between cost and choice. Lower premiums typically mean less choice in provider and higher out-of-pocket costs when you receive care.
4	Make sure your favorite doctors and hospitals are in-network providers for the plan you choose.   You will pay more to see a provider who is out-of-network.  Click here to read more about networks.
5	If you anticipate having major medical expenses due to a known illness or injury, make sure you choose a plan that will protect you financially. Can you afford a high deductible in the (likely) event you need care, or would it be better to pay a higher monthly premium to get a lower deductible?
6	Figure out roughly how much you or your family will incur in out-of-pocket medical expenses for the year. Consider prescription medications, chronic conditions, etc.
7	Be sure you understand what counts towards the deductible in any plan you are considering. For example, does your co-pay count towards the deductible?
8	Be sure you understand each plan’s rules for in-network vs. out-of-network coverage.  Is there a separate deductible for in-network vs. out-of-network care?  Will out-of-network care be covered?  Some plans cover it at a reduced rate, some will not cover it at all.
9	Once your coverage begins, understand all the details of how it works BEFORE you visit the doctor or other provider. If you are unsure of something, don’t be afraid to call your insurance carrier. If we helped you buy your coverage, you can also call us for information at any time.

 Source:  American Institutes for Research

Virginia Medical Plans Can Help

Health Insurance is confusing stuff!  There is a lot to know and a lot to sort through.

It costs you NOTHING to use our services, so why go it alone!   Get in touch so we can help you understand your options and choose the best coverage to meet your needs.

Open Enrollment runs from November 15, 2014 through February 15, 2015 and you can choose a new 2015 plan at any time during those dates.  For coverage effective January 1, 2015, you must enroll by December 15, 2014.  Click here for more about key dates during Open Enrollment.

Reach us by phone: 800-867-0800 or email: jkatz@vamedicalplans.com.

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