New year, new health insurance

2020 is finally coming to an end!! If you’re someone like me who has chronic health problems, then a New Year is something to dread, with new deductibles and out-of-pocket maximums. If you’re like a lot of Americans, however, you probably aren’t quite sure what those are. Here are the most common costs associated with health insurance:

Premium

This is the amount you pay each month for the honor of carrying that health insurance card in your wallet and considering yourself ‘covered’. Whether or not you utilize your health insurance in any way, shape, or form, you pay this amount if you choose to have insurance. If you are insured through your employer, you likely pay a portion of your premium and your employer likely pays a portion. Splitting this cost is a benefit that your employer provides you. If you are covered by Medicare, you (or your spouse or parent) spent your working years paying into the Medicare system, and your Medicare Part A premium is already paid in full. Your Medicare Part B premium, however, is a separate cost. In 2021, the standard Part B premium is $148.50 per month, but depending on your income could be as high as $504.90 per month. If you are covered by Washington State Medicaid, you have no premium for that coverage.

Deductible

This is the amount you pay before your insurance ever starts paying. Not all services are subject to your deductible, however. You can find out if a service will be applied to your deductible by calling the number on the back of your insurance card. In 2021, the Medicare Part B deductible is $203. The rest of us are probably not so lucky. My employer-sponsored deductible is $3,750. Yours may be less or more.

Coinsurance

Also called a ‘cost share’, this is the amount that you pay alongside your insurance after the deductible has been met. For instance, if you have a 70/30 plan, after your deductible has been taken care of, your insurance foots 70% of the bill while you pay 30%.

Out-of-Pocket Maximum (OOPM)

This is—you guessed it—the maximum amount that you pay each plan year out of your own pocket. Whether or not the deductible applies to the OOPM is determined by your health insurance. For instance, if your deductible is $1,000 and your OOPM is $2,000, then it’s possible the total amount you pay in a plan year is $2,000, but it’s also possible that it’s actually $3,000. Your coinsurance does apply to your OOPM.

Copay

Your copay is the $30 (for example) that you pay when you go to the doctor because you have a sprained pinkie (for example). Preventative care—like your annual physical—is not subject to your copay, and your copay is typically not subject to your OOPM, meaning you’ll pay it whether or not you’ve met your OOPM.

Plan Year

The Plan Year isn’t a cost, but something to be aware of. Medicare and most insurances have plan years that run concurrent with the calendar year: your deductible and OOPM reset in January. Not all insurances work that way, however. For example, Tricare has a plan year that is based on the federal government’s fiscal year of October to September. If your company signs up for insurance in May, your plan year is likely July to June. If you’re not sure, call the number on the back of your insurance card.

If you have a question about your benefits, call your insurance provider. The back of your insurance card will have a customer service number. If you have Medicare, the phone number is 1-800-MEDICAR. If you have Washington State Medicaid, you should have a letter indicating who your case worker is, and they always sign with their phone number. Another resource for assistance is the Statewide Health Insurance Benefits Advisor (SHIBA). Their number is 800-562-6900, and they have an office in Pasco. The local number is 509-543-1952.

KyriAnne MW Boothroyd has been billing health insurance since 2007. She is a strong believer that the fact that people are forced to make health decisions based on finances is one massive problem that America needs to solve. You can contact her with questions at kmwboothroyd@gmail.com.

Photo by Scott Graham on Unsplash