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Types of health insurance expenses

Unless you have free or subsidized coverage through Medicaid or another government program, you will likely have a few different types of costs regardless of the type of health plan you choose. These costs are often called “cost sharing”. Common costs to watch out for include:

1. Monthly premium

The monthly cost you pay for health insurance coverage.

2. Deductible

The amount you have to pay out of pocket before your health insurance starts paying for all the services you use. If you receive health services before you reach your deductible, you will usually have to pay 100% of the cost, even for services that are covered by insurance.

3. Copay (Copay)

The flat rates you pay every time you use health services. Sometimes copayments, also called copays, are due upon arrival for your appointment and are sometimes billed at a later date. Complement payments may vary depending on the type of healthcare provider (HCP) you see (for example, a general practitioner (PCP) versus a specialist) or the type of service (for example, emergency room or office visit).

4. Coinsurance

The percentage of health care costs you have to pay once you reach your deductible. For example, if you have 20% coinsurance for hospital services and receive a hospital bill for $10,000, you’ll have to pay $2,000.

Other health insurance terms to know

Health insurance has its own terminology, which can be confusing. Some key health insurance terms to know include:

1. Network Providers

Many health plans have a variety of health care providers that they contract with. Caregivers who contract with the plan are called “in-networkers.”

2. Off-network providers

Healthcare providers who are not in a health plan’s network are considered “out of network.” Depending on the type of plan you have, out-of-network providers may be covered at lower rates than in-network providers. That means your insurance covers less of their expenses, so you’d pay more to see them.

Some plans offer no coverage for out-of-network providers, meaning you’d pay 100% of the cost to see them.

3. Out of pocket maximum

Once you’ve spent money on deductibles, copayments, and coinsurance, there’s a limit to what you’ll have to pay out-of-pocket each year. This limit is called the “out-of-pocket maximum”. Once this amount is reached, you will not be charged extra for services covered by network providers.

However, you may be billed for care you get from out-of-network providers or services that are not covered.

Monthly premiums do not count towards your out-of-pocket max,

4. References

In some health plans, you have to get a referral — sort of like a permit — to see specialists or other health care providers for certain services. Referrals are written orders from your PCP.

5. Prior Authorization

To receive certain services or prescriptions, some plans require you to get prior authorization, which is a prior authorization or pre-approval. Your healthcare provider usually sends the forms to your insurer on your behalf, although it’s technically your responsibility to make sure you get approval before applying for service. If you don’t get prior authorization for services that require it, the health plan may deny your request, and you may be left paying for all of the service yourself or not getting it at all.

6. Open enrollment

Open enrollment is the designated time each year when you can take out health insurance or switch plans. Open enrollment time varies by company for work-based insurance and for different programs such as Medicare or the Health Insurance Marketplace. Outside of the open enrollment period, you cannot switch plans unless you have a change in your life circumstances, called a “qualifying life event”, which allows you to have a special membership period.

7. Special Membership Period

If you have a change in circumstances, you may qualify for a special membership period. This means you can take out or switch insurance outside of an open enrollment period. Circumstances that may qualify you for a special enrollment period include changes in family structure (for example, having a child, getting married or divorced), moving, or losing work-based benefits.

8. High Deductible Health Plans

High-Deductible Health Plans (HDHP) they are plans with high deductibles, which means the amount you pay out-of-pocket before your health insurance starts covering services is more than a normal amount. The threshold for an HDHP changes every year. In 2022, HDHPs were defined as plans with deductibles of at least $1,400 for individuals and $2,800 for families. Any type of common health plan can be an HDHP.

9. Health Savings Accounts

Health Savings Accounts (HSA) are savings accounts that allow you to use tax-free dollars for qualifying health care expenses. HSAs are often bundled with HDHPs to help you pay your health care costs before meeting your deductible. The balance in your HSA is yours, so unused amounts accumulate and can add up over time.

Read what you are entitled to as a woman when it comes to health insurance>>

Types of health plans

There are different types of health insurance plans, with different costs and rules. The most common types of health plans include:

1. Health Maintenance Organizations (HMOs)

HMOs often have the lowest monthly premiums, but they’re also usually the most restrictive. In an HMO, you must have a PCP and get referrals from that PCP to see specialists. An HMO only covers the services you receive from healthcare providers who participate in their network. Outside of that network, HMOs usually don’t cover any costs unless it’s an emergency.

2. Preferred Supplier Organizations (PPOs)

PPOs tend to have higher monthly premiums than HMOs because they give you more flexibility. PPOs do not require a member to have a PCP or receive referrals to see specialists. Like HMOs, PPOs have a network of contracted health care providers. You typically pay more, but not the full cost, to see health care providers outside of the plan’s network.

3. Point of Service (POS) plans.

POS plans are like a cross between HMO and PPO. POS plans may require you to have a PCP and get referrals before seeing specialists. POS plans have contracted networks of healthcare providers, but tend to allow you to see healthcare providers outside of the network at a higher cost. POS rewards typically fall between HMO and PPO.

Resources

Health Insurance 101: How to choose insurance when you have fibroids

Health insurance 101: how to choose insurance in case of endometriosis

Health Insurance 101 for Women: What you are entitled to as a woman

Health Insurance 101: What to Know About Open Enrollment in Health Insurance (Video)

This resource was created with support from Myovant Sciences.