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Understanding Your Health Insurance

~Common Terms You Should Know~

~Deductibles, Coinsurance and Maximum Limits~

Example #1: Deductibles, Coinsurance and Out-of-Pocket Maximum


You have an insurance plan that has a:

$5,000 deductible
20% coinsurance
Out-of-pocket maximum of $6,000

This means:

You must pay the first $5,000 of your medical costs.
After that, your plan covers 80% of the costs, and you pay the other 20%.
When the amount of coinsurance you've paid reaches $6,000, the plan covers 100% until your "plan year" renews. A plan is good for 1 year.
At the start of each year, your deductible and coinsurance resets for the next plan year and the $5,000 deductible and 20% coinsurance will start again.

Example #2: Coinsurance After You've Met Your Deductible


You bruise your hip in a fall and you need an X-ray. You've met your annual $5,000 deductible so your plan now pays for benefits. What you pay to see your doctor depends on your coinsurance, which in our example, is 20%.

Here's how the costs might break down:

The X-ray costs $200.
Your plan covers 80%, which is $160.
Your out-of-pocket cost, or coinsurance, is $40.


Example #3: Maximum Limits


Your plan covers up to a certain amount for tests, procedures and medical services. These limits help keep rates fair and reasonable, which helps lower costs for all members.

Let's say your doctor charges more for an X-ray.

Your plan covers a maximum of $200 for an X-ray.
Your doctor charges $300.
You may have to pay the $100 difference.

This is for informational and educational purposes only and does not supersede or replace your insurnace benefit booklet. All benefit determinations will be based on the terms described in your insurance benefit booklet.