Health Insurance Plan Coverage
Health Insurance Plan Coverage
health insurance plan coverage

Facility Charge and Double Deductible

Some health insurance plan coverage may have a facility charge for the use of specific medical facilities. If so, you pay the facility charge in addition to the deductible and coinsurance. For example, for a hospital inpatient (overnight) admission, or an emergency room visit, you may have to pay an additional $500 or so for that specific usage as well as having to meet the annual deductible and coinsurance. By contrast, if there was outpatient surgery instead, there may be no facility charge for that.

Some plans may have one deductible for inpatient hospital and one for whatever outpatient coverage the plan provides. Since an inpatient stay is often preceded by significant outpatient care, this may amount to a double deductible. It may be best to consider it as such when comparing such a plan with other plans that have only one deductible for both outpatient and inpatient combined.

Deductibles for Health Savings Account (HSA) Qualifying Plans

The deductible for HSA qualifying plans have a deductible structure a little different from most other plans with a deductible. For non-HSA plans, when two or more family members enroll in the same policy or evidence of coverage, the deductible is usually per person. For HSA qualifying coverage, the deductible is per family.

Under the tax code, the allowable minimum and maximum deductible per family is double the minimum and maximum deductible for a single applicant. Within the range of allowable deductibles, the pricing tables usually follow the same pattern. You may want to avoid having the larger family deductible if you believe that the likelihood of two family members having large medical expenses in the same year is small. If so, you can avoid a family deductible by having each family member buy separate a health insurance plan. Then each family member would have an individual deductible. Compare the premium pricing both ways.

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Limitations and Scheduled Coverage

Some plans available for a health insurance plan may have significant limitations on specific expenses. For example, a limit on the amount the plan pays for daily room and board for inpatient hospital, or an annual limit on how much it pays for outpatient surgery, or a limit per medical condition, or a limit on medical expenses per year that is way less than the policy maximum. These amounts are usually listed on the schedule page of the policy. Many careless buyers have been burnt because they did not take the time to understand the limitations. This problem has been common with operations that sell "association" plans that supposedly have a volume price advantage because the plan is sponsored by an "association". The prospective health insurance buyer imagines that the imagined, and imaginary, special strength and safety of the association purchase means there is no need to carefully scrutinize this particular coverage. Big mistake.

A scheduled policy that pays specific amounts only for specified procedures could be just as disappointing. You could have an unpleasant surprise when you discover that the charges for the procedures you need cost much more than the specified amounts, e.g., a nurse who bought a scheduled policy for her husband because it was relatively cheap and she "knew" what charges to expect for different procedures. He later had to be hospitalized and it cost them $15,000 more than they expected because the scheduled amounts did not sufficiently cover all the charges. It would have been better to buy a policy with a $10,000 deductible which then pays for what is medically necessary with no scheduled limitations and at least know what to expect. It would have even cost less per month. However, she did not want that big a deductible. An expensive error in judgment.

Because of this sort of problem, such coverage has fallen out of favor and it may be hard to find such a health insurance plan.

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Comparing Plans

Determine what the maximum potential annual out-of-pocket is for each plan when comparing a health insurance plan with others. Some buyers start by comparing deductibles. That is useless. Instead, add the deductible to the coinsurance plus any extra possible out-of-pocket like facility charges, extra deductibles, copays, etc., and compare plans on the basis of that total. The coinsurance alone could be a much greater figure than the deductible. If you have not compared total potential annual out-of-pocket between plans, you have not begun to compare.

Limitations and exclusions in a health insurance plan need to be read carefully just in case there is something there that you do not like. Most prescriptions may be covered but one category may not, e.g., injectibles may, or may not, not be covered. Prescriptions may not be covered at all. Mental health care may not be covered. Some people will say, "I don't need that", but many people who end up needing mental health care had no prior reason to believe that they ever would. Certain surgeries may not be covered or may have a waiting period. Dollar limits may be in place for certain procedures. Nursing home care following a hospital stay may not be covered or may be very limited. Except for specific mandates by law in some states, e.g., child wellness, mammograms, prostate screening, or standardized plan features in a few states, insurers can design plans however they want.

It's more work, but it pays to get a good overview on what to look for. This article may be of further help when shopping for a health insurance plan choosing health insurance.

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