Friday, January 3, 2014

Hey Doc, What Will It Cost Me to Use This Insurance?

“Get out your adding machine because insurance isn’t cheap, but it can save you a lot in the long run if you get real sick or hurt real bad,” said Texas Medical Association (TMA) Board of Trustee Chair Carlos “Hey, Doc” Cardenas, MD in the 14th installment of TMA’s “Hey, Doc” video series. This week, Dr. Cardenas explains the different costs you will pay to use your insurance, as well as new rules in the Affordable Care Act that limit your total out-of-pocket medical care costs for the year.

Q. What will it cost me to use this insurance? 

A. There are different types of costs you will pay to use your insurance.

Remember that when you first buy your insurance, you pay a set monthly fee to make sure it’s there for you when you need it, called a premium. That premium depends on a few things, like where you live, your age, how many people are in your family, the services you need, and whether you smoke. Depending on your income, you might also qualify for a subsidy to lower your premiums, even when you are not using your insurance, so you are covered when a medical issue does come up.

Then, when you go to use your insurance ― at the doctor’s office, or hospital, or pharmacy, for instance ― you share some of the costs of your medical care with the insurance company. Those costs are called deductibles, co-insurance, and co-payments. You might hear this referred to as “cost-sharing” or “out-of-pocket costs” because while your insurance plan helps cover a good portion of your medical expenses, you also pay for some of those costs out of your own pocket. And those amounts depend on which type of plan you choose and what category it falls into: bronze, silver, gold, platinum, or catastrophic. (See “What will it cost me to buy this insurance?”)

Q. What are the limits on out-of-pocket costs?

A. The health care law puts a limit on what you pay each year out of your own pocket for the medical expenses covered by your insurance, called “out-of-pocket limits.” For 2014, the out-of-pocket limits are $6,350 for an individual plan, and $12,700 for a family plan for the year. That’s the most you would pay for the year, and after you reach that limit, your health plan pays for 100 percent of the services it covers. What counts toward your out-of-pocket limits? It doesn’t include your premiums. But depending on your health plan, it can include costs like deductibles, co-insurance, co-pays, and sometimes care that’s out of your plan’s network.

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