It’s that time of year again, when many of us are making important decisions about our insurance coverage and health benefits for 2023. This month we’re focused on helping our current and prospective members get up to speed on all things “health insurance,” which will help you make better informed decisions about your health coverage needs for the upcoming year.
Here are some key terms and definitions that you will want to be familiar with when evaluating your plan options:
Please note the examples below are for illustrative purposes only and do not reflect true costs of care.
1. Deductible.
If your plan has a deductible, you will have to pay that full amount for the healthcare services you receive before Blue KC starts paying a portion of your expenses.
Let’s play out an example together. Amy, our fictional member, is recovering from a past injury and visits her Physical Therapist six times over the course of three months. Each of the six visits cost $100, and her plan’s deductible is $1,000. These Physical Therapy visits are the only care Amy has received this year, and the provider’s bills add up to $600. Since she hasn’t yet met her $1,000 deductible, Amy would be responsible for paying the full amount of $600, leaving her with $400 remaining until Blue KC will start paying for a portion of her expenses.
| Health Service | Cost | Deductible ($1,000) | Coinsurance | Copay | Out-of-Pocket Max ($3,000) |
|---|---|---|---|---|---|
| Physical Therapy | $600 | $600 | $600 |
2. Co-insurance.
Co-insurance is typically shown as a percentage. It is the percentage of healthcare costs that you as a member will be responsible for after your spending exceeds your deductible. You will pay a certain percentage to the provider, which varies based on the care you receive, and Blue KC will pay the remaining costs.
We’ll keep following Amy’s journey. Amy is out for a run, and she lands awkwardly, injuring her ankle. She visits an Urgent Care location, and the doctor recommends she get an MRI scan of her ankle to determine if she might need additional care. Amy receives a bill from the Urgent Care for $100 that goes towards her deductible – she’s now spent $700. The MRI provider sends a bill for an additional $1,000, meaning she has now exceeded her deductible amount.
So, what happens? Amy’s plan indicates that she will pay 10% in co-insurance costs once she hits her $1,000 deductible, while Blue KC will pay the remaining 90% of the cost for her. Amy will pay the first $300 to meet her deductible of $1,000. She will then pay $70 for co-insurance because it is equal to 10% of the remaining cost ($700 x 10% = $70). Blue KC pays $630 to the provider on Amy’s behalf. Amy has now spent $1,070 on healthcare expenses this year.
| Health Service | Cost | Deductible ($1,000) | Coinsurance | Copay | Out-of-Pocket Max ($3,000) |
|---|---|---|---|---|---|
| Urgent Care | $100 | $700 | $700 | ||
| MRI Scan | $1,000 | $1,000 | $70 | $1,070 |
3. Copay.
A Copay is a fixed amount you pay for a healthcare service or medication. Your copay will vary by the type of covered healthcare service and is charged even after you have met your deductible amount.
Amy’s Urgent Care doctor gave her a prescription for some anti-inflammatory medication to help with her ankle pain. Amy visits her local pharmacy to pick up the medication and is required to pay a $15 copay for it. Her plan benefits allow her to pay this lower, fixed cost as opposed to the higher, actual cost of the medication. Amy has now spent $1,085 on healthcare expenses this year.
| Health Service | Cost | Deductible ($1,000) | Coinsurance | Copay | Out-of-pocket Max ($3,000) |
|---|---|---|---|---|---|
| Prescription | $15 | Met | $15 | $1,085 |
4. Out-of-Pocket Maximum.
An Out-of-Pocket Maximum is the highest amount you will directly pay providers for healthcare services in a given plan year. This maximum limit never includes your premium or healthcare services that are not covered by your plan.
To finish our story, Amy receives the results from her MRI and gets the unfortunate news that she will need surgery to repair her injured ankle. The fees associated with the surgery are high: $25,000. Amy’s coinsurance expense for the surgery is also 10% ($25,000 x 10% = $2,500), while Blue KC will pay the remaining 90% of the costs.
Amy’s Out-of-Pocket Maximum is $3,000. Adding $2,500 to her previous spending of $1,085 means Amy will exceed her annual Out-of-Pocket Maximum. So, Amy will actually pay a lower amount of $1,915 to reach her $3,000 maximum. Blue KC will pay for the rest of Amy’s surgery costs since she reached her annual maximum amount. If she needs additional care later in the year, Blue KC will cover those costs as well.
| Health Service | Cost | Deductible ($1,000) | Coinsurance | Copay | Out-of-Pocket Max ($3,000) |
|---|---|---|---|---|---|
| Surgery | $25,000 | Met | $1,915 | $3,000 |
As you consider your health plan decision for 2023, please consider the following questions:
- What was your healthcare usage like this year? Log in to your member portal at MyBlueKC.com and visit the Claims, EOB, & Usage page to view your in- and out-of-network spending amounts.
- Are the providers you visit in the plan’s network? On the Find Care page, select Continue As A Guest to view the plan network you are considering. You can search for the names of your providers within that network to make sure your future visits remain at a lower price.
- What healthcare expenses might you incur in 2023?
While we can’t tell you which plan to pick, we’re happy to support you with helpful information along the way. We look forward to having you as a Blue KC member in 2023!