The deductible, quoted in whole dollar amounts is the amount a policyholder is responsible for before the insurance policy begins covering any costs. Unlike deductibles in other forms of insurance, the deductible is quoted annually, with all medical claims going towards the amount. If a policy has a $3,000 deductible, you would be responsible for the first $3,000 dollars of all medical costs in a given year before any coverage begins. (Some policies may have certain provisions that reduce costs of specific medical services even before a deductible has been met)
Coinsurance is the percentage share of medical costs that a policyholder is responsible for. Generally this percentage share is applied to medical costs once the annual deductible has been met, but before out of pocket maximums. Assuming the deductible has been met, a policy with 20% coinsurance means that for a $1,000 claim, the policyholder would be responsible for $200 dollars.
Similar to coinsurance, a copay is the share of medical costs policyholders are responsible for (differences here). Instead of a percentage however, copays are whole dollar amounts. As with coinsurance, copays are generally applied only after deductibles have been met. A $50 copay means that the consumer is required to pay 50 dollars for a procedure assuming the deductible has already been met.
Out of Pocket Maximums
The out of pocket maximum is the most a policyholder would have to share in costs on an annual basis. This includes any amounts paid towards deductibles, coinsurance and copays. Out of pocket maximums generally do not include the monthly premiums paid for insurance. After the out of pocket maximum has been met, the insurance company and policy will pick up 100% of all medical costs. Under the ACA, the highest the out of pocket maximum can be is $6,350 for an individual and $12,700 for a family.
Insurance Plan Types
HMO - Health Management Organization
An HMO is a health plan that provides care through a network of providers (doctors, hospitals, pharmacists) to deliver medical care. The providers on the network agree with the HMO to lower rates for plan members. Under this type of insurance coverage, the cost of care is only covered if the policyholder visits a provider in the network.
Furthermore HMOs require that the policyholder select a primary care physician (PCP) who acts as the healthcare gatekeeper for the consumer. Under an HMO, a policyholder must first visit the PCP and receive a referral in order to see a specialist or receive treatment / services such as imaging and diagnostic tests.