Understanding Your Health Insurance Plan

LFM_understanding_insuranceBy: David Jaramillo
Lane Fertility Institute Financial Specialist

When accessing coverage under your insurance Plan, at the beginning of a new year, understanding the plan terms or descriptions of provisions and coverage can be difficult. Below is a list of common health insurance coverage terms to help everyone understand more about their individual Plan:

Deductible: The deductible refers to the amount of money that the insured individual will need to pay annually before any benefits from the health insurance policy can be used. This is usually a yearly amount so when the policy starts again such as 01/01/15, the deductible would be in effect again and would therefore have to be met. Some services such as a physician visit may be allowed under the copay only. However, as the insured individual, you should contact your Plan to understand whether the visit is applied to the deductible or is only subject to your copayment, if applicable.

Co-pay: The co-payment is a fixed amount that the insured is required to pay at the time service is rendered. It is usually required for basic physician visits.

Co-insurance: This is usually a percentage amount that is the insured’s responsibility. A common coinsurance split is 80/20. This means that the insurance company will pay 80% of the procedure and the insured is required to pay the other 20%

Out-of-pocket: This is the cost one would pay out of their own pocket. An out-of-pocket expense can refer to how much the co-payment, co-insurance, or deductible is. Also, when the term “annual out-of-pocket maximum” is used, that is referring to how much the insured would have to pay for the calendar year, excluding policy premiums, if applicable.

Lifetime Maximum: This is the most amount of money the health insurance policy will pay towards certain services (i.e. Infertility treatment not to exceed $2,000.00 per lifetime to include or exclude medications).

Exclusions: The exclusions are the things/services that the insurance policy will not cover.

Coordination of Benefits: If the insured has available two or more Plans that provide coverage for certain conditions, both plans are then billed and will coordinate payment between the primary and secondary Plan but will never pay above the billed amount.

Provider Networks: Most health Plans have health care service providers that have made a deal with the health plan to provide services at discounted rates. Together, these health care service providers are known as the health plan’s Provider Networks. It is important to understand whether your Health Care Provider is considered In-network or Out-of-Network. Even if you have benefits Out-of-Network, in all likelihood, you will have a higher co-insurance due by you along with a higher deductible and any payment made on services that doesn’t pay the charge in full is then your responsibility. For example, if your PPO plan requires a $45.00 copayment to see an in-network specialty physician, but 50% coinsurance if you see an out-of-network specialist, instead of paying only $45.00 to see an in-network specialist, you could end up paying $200-$300 to see an out-of-network specialist, depending on the amount of the bill. HMO plans and some EPO plans will not allow you to use an Out of Network provider.

Prior Authorization: Most health plans won’t allow you to get whatever health care services you wish, whenever or where ever you wish. Since your health plan is paying for at least part of the bill, it will want to make sure you actually need the health care you’re receiving and that you’re getting it in a reasonably economic manner. One mechanism used is a pre-authorization and HMO plans all require this. Some other plans as well (i.e. PPO, POS, EPO) require review/authorization for Specialist services (i.e. Infertility services). Authorization if required must then be obtained before the service is rendered or it will be denied and you could be then liable for the cost.

These are just some of the basic tenets of understanding your Plan coverage. As a patient in a fertility practice, it is particularly helpful to understand these terms to maximize your coverage and minimize unexpected costs.

Please visit Lane Fertility Institute for a list of Accepted Insurance Plans



David Jaramillo. Financial Specialist for Lane Fertility Institute.  Mr. Jaramillo brings over 30 years of experience working in health care finance.  He spent a decade as the financial specialist at the UCSF Center for Reproductive Health where he pioneered novel systems that are still used today to assist patients in navigating the complexities of their fertility benefits.