COPYRIGHTED MATERIAL
Premium This is a fee the insured pays monthly, quarterly, or annually for the health insurance. For employees enrolled in their employer’s healthcare plan, the premium is deducted from their paycheck .
HEALTH CARE COVERAGE: WHAT DOES THE INSURED PAY?
Copay This is a fixed amount, usually about $10–$40 that the plan member pays. It’s usually collected at the doctor’s office when you arrive for your appointment or at the pharmacy when you pick up a prescription.
Coinsurance In addition to the premium, deductible, and copay, some plans charge coinsurance which is a percentage of the cost of the healthcare service — usually 20–40%. PRODUCT PREVIEW Deductible This is a set amount which must be paid out of pocket before the insurance company starts paying its share. Deductibles range from zero to over $4,000 a year depending on the plan. Preventive care like physicals, screenings, and vaccines are usually covered before the insured reaches the deductible.
Out-of-Pocket Maximums. This is the absolute maximum dollar amount the insured company has to come out of pocket in a year for medical care. Once the insured hits this amount — whether it’s through the deductible, copays, or coinsurance or a combination, the rest of their medical costs are 100% the responsibility of the insurer . Reflect on Learning: Can you list the medical costs an insured may be responsible for, depending on their healthcare plan? Premium, co-pay, deductible, and co-insurance. Assume a policy has a maximum out-of-pocket of $1500. Over the course of the year, the insured has met their deductible of $1000, plus paid out $500 in
THE 21st CENTURY STUDENT’S GUIDE TO FINANCIAL LITERACY 291
Made with FlippingBook - Online catalogs