When a patient has health insurance the percentage of covered services that is the responsibility of the patient to pay?

Deductibles

What is a deductible?

A deductible is the amount you pay each year for most eligible medical services or medications before your health plan begins to share in the cost of covered services. For example, if you have a $2,000 yearly deductible, you'll need to pay the first $2,000 of your total eligible medical costs before your plan helps to pay.

Benefits Information

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Deductibles for family coverage and individual coverage are different. Even if your plan includes out-of-network benefits, your deductible amount will typically be much lower if you use in-network doctors and hospitals.

How do I decide what deductible amount to choose?

If you're mostly healthy and don't expect to need costly medical services during the year, a plan that has a higher deductible and lower premium may be a good choice for you.

On the other hand, let's say you know you have a medical condition that will need care. Or you have an active family with children who play sports. A plan with a lower deductible and higher premium that pays for a greater percent of your medical costs may be better for you.

What is the difference between a deductible and a copay?

Depending on your health plan, you may have a deductible and copays.

A deductible is the amount you pay for most eligible medical services or medications before your health plan begins to share in the cost of covered services. If your plan includes copays, you pay the copay flat fee at the time of service (at the pharmacy or doctor's office, for example). Depending on how your plan works, what you pay in copays may count toward meeting your deductible.

What is coinsurance?

Coinsurance is a portion of the medical cost you pay after your deductible has been met. Coinsurance is a way of saying that you and your insurance carrier each pay a share of eligible costs that add up to 100 percent.

For example, if your coinsurance is 20 percent, you pay 20 percent of the cost of your covered medical bills. Your health insurance plan will pay the other 80 percent. If you meet your annual deductible in June, and need an MRI in July, it is covered by coinsurance. If the covered charges for an MRI are $2,000 and your coinsurance is 20 percent, you need to pay $400 ($2,000 x 20%). Your insurance company or health plan pays the other $1,600. The higher your coinsurance percentage, the higher your share of the cost is. You are also responsible for any charges that are not covered by the health plan, such as charges that exceed the plan’s Maximum Reimbursable Charge.

What is an out-of-pocket maximum?

Out-of-pocket maximum is the most you could pay for covered medical expenses in a year. This amount includes money you spend on deductibles, copays, and coinsurance. Once you reach your annual out-of-pocket maximum, your health plan will pay your covered medical and prescription costs for the rest of the year.

Here’s an example.** You have a plan with a $3,000 annual deductible and 20% coinsurance with a $6,350 out-of-pocket maximum. You haven’t had any medical expenses all year, but then you need surgery and a few days in the hospital. That hospital bill might be $150,000.

You will pay the first $3,000 of your hospital bill as your deductible. Then, your coinsurance kicks in. The health plan pays 80% of your covered medical expenses. You'll be responsible for payment of 20% of those expenses until the remaining $3,350 of your annual $6,350 out-of-pocket maximum is met. Then, the plan covers 100% of your remaining eligible medical expenses for that calendar year.

Depending on your plan, the numbers will vary—but you get the idea. In this scenario, your $6,350 out-of-pocket maximum is much less than a $150,000 hospital bill!

What's the difference between copays and coinsurance?

Use this chart to compare copays and coinsurance to better understand the differences.

Benefits Information

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Common Billing Terminology

Advanced Beneficiary Notice (ABN)

An Advanced Beneficiary Notice is a form advising you that tests performed by your doctor may not be covered by Medicare. The purpose of the ABN is to let you know in advance that these services may not be covered and to advise you that you will be responsible for payment of these charges.

Assignment of Benefits

Assignment of Benefits means the physician agrees to accept payment from an insurance company first and then bill the patient for any after-insurance balances. In this arrangement, the patient has assigned rights for payment, via signature, to the physician for services rendered.

Billing Statement

A summary of current activity on an account.

Birthday Rule

The Birthday Rule is endorsed by the National Association of Insurance Commissioners (NAIC). The Birthday Rule states that the plan of the parent whose date of birth (month and day) falls earlier in the calendar year is the primary plan for dependent children. For example, if the father’s birth date is March 4 and the mother’s birth date is January 22, the mother’s plan would be primary. If both parents have the same birth date, the health plan in effect for the longer period of time will be primary.

Claim

The information billed to the insurance company for services provided.

Co-Insurance

Co-insurance is an arrangement by which the patient and the insurance company share in the payment of a service. Co-insurance takes effect after the approved deductible amount has been met.
For example, assigned Medicare benefits have a 20 percent co-insurance. This means that after the approved deductible amount has been met, Medicare pays 80 percent of the approved amount and the patient, or the patient’s supplemental insurance pays the remaining 20 percent. The deductible in most cases becomes the responsibility of the patient.

Coordination of Benefits

Coordination of Benefits is the determination of benefits payable under more than one group health insurance so the insured’s total benefits do not exceed 100 percent of the medical expenses.

Deductible

The portion of eligible (covered) expenses that you must pay each year before coverage begins.

Eligible Charges (Allowed Amount)

The maximum dollar amount allowed for covered services rendered by participating providers and facilities or by nonparticipating providers and facilities. Deductibles and coinsurance amounts are calculated from eligible charges. Participating providers and facilities accept this allowed amount as payment in full for covered services. Nonparticipating providers and facilities may not accept this amount as payment in full for covered services.

Evidence of Coverage (EOC)

A written guide from your health plan that explains what the plan does and does not cover and the rules you must follow for getting care.

Explanation of Benefits (EOB)

A statement provided to the insured by an insurance company explaining how the claim was processed.

Flexible Spending Account

A short-term savings account that lets you set aside pre-tax income and use it to pay for health care or child care during the year.

Guarantor

The person responsible for paying the bill.

Insurance Deductible

An insurance deductible is a minimum amount the patient must pay before the insurance company will pay anything toward charges. Usually the deductible needs to be met and paid by the patient each year.

Insurance Copay

An insurance copay is the amount of money or percent of charges for Basic or Supplemental Health Services that a member is required to pay, as set forth by their health plan. This is often associated with an office visit or emergency room visit. For example $5, $10 or $25.

Non-Participation

Non-participation means the physician does not participate in the patient’s health plan; therefore, the patient is billed directly for services and is responsible for payment in full.

Open Enrollment

The period each year during which you can join a plan or change plans if your employer offers more than one plan.

Out-of-Pocket Maximum

The total amount of eligible charges each year payable by insured directly to providers or facilities; 100 percent of eligible charges will be paid during the remainder of the year once the applicable out of pocket maximum is satisfied.

Payer

A third-party entity (commercial or government insurance carriers) that pays medical claims.

Physician Participation

Physician participation is a method by which a physician agrees to accept an insurance company’s payment level as payment in full. The bill is sent directly to the insurance company with payment made directly to the physician. This excludes amounts considered patient obligation under the patient’s coverage plan. For example, co-insurance, deductibles, and non-covered services would still have to be paid by the patient.

Pre-Approval

Permission from your medical group or health plan to get a service that requires a referral from your doctor. Also called authorization or prior-authorization.

Pre-existing condition

An illness or injury you have before you join a health plan.

Premium

What your health plan charges each month to maintain your health care coverage.

Primary Insurance

The insurance primarily responsible for the payment of the claim.

Prior Authorization/Precertification

A formal approval obtained from the insurance company prior to delivery of medical services.

Secondary Insurance

The insurance responsible for processing the claim after the primary insurance determination of benefits.

Subscriber

The person who holds and/or is responsible for the medical insurance policy.

Supplemental Insurance

An additional insurance policy that processes claims after Medicare reimbursement.

Yearly Deductible

The amount you must pay each year before your health plan starts to pay. Also called annual deductible.

Yearly Out-of-Pocket Maximum

The most you have to pay for most health care services in a year. In some cases, you may still have to pay copays for some services.

When a patient has health insurance the percentage of covered services that are the responsibility of the patient to pay is known as?

What does 30% coinsurance mean?

Which term defines a percentage of the charges that the patient who is responsible for paying after the deductible has been met?

What is patient responsibility in health insurance?