The Joy’s of Insurance
As we approach the end of the year, we here at Lystra start thinking about insurances. In the case of majority of insurances, everything starts over on January 1st.
Deductibles
Out of Pocket Maximums
Visit Limits
Another thing to consider is at the end of the year, you may have met your deductible or your out of pocket max, meaning your costs for medical expense may be little to none. So, it’s best to get as much done in this period before it all starts over and you have to pay in full for services at physicians offices.
We’re here to help make it a little less confusing.
Here’s a couple definitions, in case you don’t know much about insurances, and then a video at the end explaining it a bit differently.
Deductible
This is the total amount you pay out of pocket before insurance begins to pay for anything. There are several deductibles that apply to your plan: individual, family, and out of pocket max. Sometimes, you even have a separate deductible for different services.
Let’s say you have an individual deductible of $1,000. Once you meet your $1,000 deductible, the only thing that you will be responsible for is your co-insurance or services that have a set co-payment.
You may also have a family deductible. If this deductible is met (typically because a member of the family has major medical expenses that exceeds their deductible), then your individual deductible does not apply to you for the remainder of the year. You should only be responsible for your co-insurance or services that have a set co-payment.
The out-of-pocket max is the magic number that says you are no longer responsible for any costs that you may accumulate. It is the amount you spent on your deductible, co-insurance, and/or co-pays that totals an agreed upon number with your insurance company.
Some individual’s policies have a separate deductible for Physical Therapy which is lower than their individual deductible! Are you one of those lucky people?
Copay
This number is independent of your deductible. Typically, if you have a co-pay you will not have to meet your deductible for this to come into effect. Let’s say you have a $3,000 deductible, but a $25 co-pay for each physical therapy visit. You will only pay your co-pay and not have to worry about any further expense for that visit. This amount is collected at time of service.
Co-Insurance
This is an out-of-pocket expense that calculates a percentage of your visit cost. You would have agreed to this number when electing your insurance policy. It is usually 10, 15, 20 or 30%. This number comes into effect after you have met your deductible. For example, you have met your $3,000 deductible for the year and you come in for a physical therapy visit that is billed for $100. You have a 20% co-insurance, which means you would owe the provider $20 for that visit. This amount is also applied to your out-of-pocket max and family deductible. Keep in mind that each visit cost may vary depending on the services received.
Explanation of Benefits (EOB)
The Explanation of Benefits (EOB) is the document that you receive from your insurance company that outlines your cost for a medical visit. It is important to look at these and understand them. It could save you money if the provider tries to charge you more than they should.
Here are some important definitions to understand when reading an EOB:
CPT Code- this is a code used by medical offices that describes the services rendered. The insurance company and provider have a contract that determines how much the provider can be paid for this service. This leads to the adjusted amount.
Adjusted amount- The adjusted amount is the amount the provider must write off because of their contract. You do not owe this amount.
Patient Responsibility- This is the amount your insurance says you owe to the provider according to your contract with the insurance company. They may also denote in this section what the amount applies to: deductible, co-pay, or co-insurance.
Insurance paid- This is the amount your insurance pays the provider.
