Premium: |
(AKA monthly premium) This is another term for "Bill." You pay your health insurance premium in order to receive the coverage & benefits offered by the insurance company. |
Deductible: |
The amount chosen by the insured to be met before certain benefits are to be paid by insurer. Note: The lower the deductible/ the higher the monthly premium. |
Co-Insurance: |
Co-Insurance is the amount to be paid by the policy holder and insurance company after the deductible has been met. The most common coinsurance is 80/20%. But, many plans now offer a variety of coinsurance options for premium containment such as 50/50%, 70/30%, or even 100%! Example: Many plans have a common "80/20" structure. This simply means that after you have satisfied the deductible, you and the insurance company would split the remaining cost of treatment 80/20 (you paying 20% of the remaining bill & the insurance company paying 80%) until you have reached your "STOP LOSS" or "Maximum Out Of Pocket." |
STOP LOSS or "Maximum Out Of Pocket": |
See above. This is the maximum amount of your annual exposure. Usually, your deductible and coinsurance total. Example: Let’s say you have a $1000 deductible plan. This plan is an "80/20" co-insurance plan. This means that your Co-Insurance Max is $2,000. This simple example tells us that you have paid your deductible of $1000. Then, you paid your co-insurance of 20% until your "Maximum Out-Of-Pocket" of $3,000. After this maximum out-of-pocket ($3,000), the carrier has to cover all remaining expenses 100%. *See diagram below.
| Broken Leg Injury Statement |
| Total medical expense: |
$10,000 |
| Your deductible: |
-$1,000 |
|
| Remaining |
$9,000 |
| You now split this amount 80/20 |
| until your “stop loss” of |
-$2000 |
|
| Your “Maximum Out-Of-Pocket” |
-$3000* |
| Insurance company pays |
$7000 |
|
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