It’s so confusing, right? It seems like the insurance companies are changing the rules of the game as soon as we figure them out. Here are some basic concepts.

 

  • Premium: The monthly fee for your insurance.
  • Deductible: How much you must kick in for care first, before your insurer pays anything.
  • Co-pay: Your cost for routine services to which your deductible does not apply.
  • Co-insurance: The percentage you must pay for care after you’ve met your deductible.
  • Out-of-pocket maximum: The absolute max you’ll pay annually.

So here is an example of how this generally works:

Your deductible is $500, and you have not met any of your deductible expenses for this year yet. Your co-insurance is 20% after you meet your deductible. Your out of pocket is $3,000.

You need three cavities filled. The dentist says that it costs $1,200. In this situation, you would pay your $500 deductible, plus 20% co-insurance on the remaining $700, which is $140. So the total that you would pay is the $500 deductible plus $140 co-insurance for a total of $640.

Once you have met your deductible for the year, any other medical treatment that you may need after that will only be subject to that 20% co-insurance, and once you have spent all the way to your $3,000 out-of-pocket maximum, then insurance should cover the rest of your expenses. If you know that you need a few different medical treatments, and have been putting them off 1) don’t put off necessary medical treatment 2) but if you can plan them out, do it to maximize what you can get covered in that one year since you may be meeting your deductible and even out-of-pocket.

Every insurance plan is different, you should call your insurance provider to understand the details of your plan since they change every year.