Health Insurance: Payments & Fees

Health insurance services and premiums are a major expense for most families in the US. In the recent year the average increase in cost was over 10% every year. As a result insured pay more for premiums for services and drugs. Employers tend to shift their cost to the employees as well as terminating coverage for high prices services.

It is very important to confirm coverage before seeking health services; otherwise the insured may be liable for very high medical bills.

Payments and fees associated with the health insurance:

Premiums: The Cost for the Health Insurance

For group members a payroll deduction may be available. This payment is deducted pre-tax. Employers/Group administrators may pay portion of the premium as a benefit to the group member.

For individual members: A monthly premium is required to the insurance company. Good health insurance plan for a family may cost around $1,000 a month.

Deductible

The amount that insured pays every time that he/she seeks for a service. The deductible is based on a fee schedule and could be anywhere from $5-45 for doctor office visit, to $30-100 for hospital’s emergency room.

In some health plans the insured has to satisfy the deductible amount before the insurance pays its share. This deductible amount may be $500-2500 for individual and $5000 or more per family each calendar year.

Co-Insurance

The share that the insurance covers after the deductible amount is met. As an example the health plan is 80/20 with $25 deductible. After the insured paid the $25 deductible, the insurance will pay 80% of the rest of the cost. The insured is liable for the additional 20%.

Prescription Drugs

There are many ways how the insurance companies charge for drugs.
One common way is to define 3 groups: generic, medium level and Brand. For each group there is different price.

Another common practice is to charge a percentage of the drug’s cost.

Maximum Plan Benefits

Each health plan has a “maximum life benefits provision”. This is the maximum amount that insurance companies may be liable for the entire length of the plan.

Fee Schedule

The negotiated amount that insurance carriers pay to the health providers for their service. Deductibles and co-insurance payment are based on this fee schedule.

Patients may pay significantly more for the same service if not covered by health insurance.

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