medical plan terminology
Coinsurance Coinsurance refers to the percentage of charges you and your plan will pay for covered services after your deductible has been met. For example, if your plan has a coinsurance split of 80/20, this means your plan will pay 80 percent of charges and you will pay 20 percent of charges. Copay A copay is a fixed dollar amount you pay for covered services, such as an office visit, in addition to what the plan pays. The copay is normally paid at the time of your visit. Deductible The deductible is the amount you must pay for covered services before your plan begins to pay. The deductible starts over every January 1. Embedded Deductible In a health plan with an embedded deductible, no single individual on a family plan will have to pay a deductible higher than the individual deductible amount. Once you meet the individual deductible, your plan’s coinsurance is applied. Embedded Out-of-Pocket Maximum In a health plan with an embedded out-of-pocket maximum, no single individual on a family plan will have to pay more than the individual out-of-pocket maximum amount. Once you meet the individual out-of-pocket maximum amount, your plan begins to pay 100% for the individual’s expenses for the remainder of the year. High-Deductible Health Plan (HDHP) HDHPs cover preventive care before the deductible - the Affordable Care Act (ACA) requires this of all plans - but under an HDHP, no other benefits are provided until the insured has met the deductible. That means HDHPs cannot cover office visits or prescriptions that do not qualify as preventive prior to the deductible being met (as opposed to a plan that has a high deductible but also requires only a copay for office visits). After you meet your deductible, you and the plan will pay the plan’s coinsurance. Non-Formulary Drug A non-formulary drug is a prescription drug that is not included in the insurance carrier’s preferred drug list. Formulary drugs, both generic and brand name, are chosen for their cost, effectiveness, and their safety. Non-formulary drugs will cost you more than formulary drugs. Out-of-Pocket Maximum The out-of-pocket maximum is a specific limit for the total amount you will pay each year (includes amounts applied as copays, deductible and coinsurance) before the plan pays 100% of the covered services for the remainder of the year.
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