Basic Health insurance questions?

Hello everyone. I come from a country where health insurance always covers everything, and I never cared of that so much. Now being in the US I find everything very confusing and would highly appreciate if someone could answer me some basic questions:

what do the following terms mean in regards to health insurances:
#1: Annual deductible: Individual/Family
#2: Out-of-pocket maximum: Individual/Family
#3: Coinsurance percentage
#4: Lifetime coverage limit
(the latter is 5000 which sounds unbelievable to me)

Further, how does a health savings account helps me. If I take a plan with HSA I seem to have to pay more so I wonder how that makes sense.

Thanks alot.

Hello.

Deductible is the amount of money you must pay first before your plan benefits begin to pay. Many plans will waive a deductible if you are only using "routine" benefits, but you need to confirm this with the insurance company.

Numbers 2 and 3 almost go together. Your plan will pay a certain percentage of agreed payment with the medical doctor or other provider you use. Some plans say 80% - 20%, some say 90% - 10%, etc. Once you confirm what your percentage of responsibility will be, the out-of-pocket maximum will tell you what total 20% or 10% you must pay. It may be low, say $500.00 or it could be higher. A typical figure may be $1500.00, but your plan could be more or less. When you spend whatever amount your limit is, then your plan will become 100%.

If your plan truly has a $5,000.00 lifetime maximum, that is a terrible plan indeed. You should check to make sure it doesn't say $5,000,000.00 (Five Million). There are some employers out there though that would do this kind of thing to their employees so you will just have to confirm if it's true.

HSA. The HSA may or may not help you. An HSA allows you to deduct your contributions to it from your income tax or contribute pre-tax dollars from your paycheck if your employer has what's commonly called a "cafeteria plan" or an IRS 125 plan that offers a choice of benefits. You may also add in a contribution from your employer, and have your spouse or even your Uncle contribute too. Money from family members can be contributed. The IRS limits the total amount you can contribute. Your employer can tell you what the limits are, but my guess is, if your employer really has a 5K limit on your healthplan, the HSA probably ain't much better.

Your HSA money earns tax-free interest and is available to you whenever you need it. You can also take the account with you if you change jobs, and the balance can keep growing for as long as you like.

There is no rule that says you have to spend the money on just health care expenses, but if you spend the money on "non-qualified" expenses, you will be taxed, and there may be added penalties.

The Deductible usually applies to all your services (except Doctors office visit Usually) which is your Out of pocket costs before your benefits start.... then the COINSURANCE is the % that you have coverage after you fulfil the INDIVIDUAL and/or your FAMILY Deductible....

Example...

Deductible is 1000 and you have a 80% coinsurance and 5000 Out of pocket max....

You visit the Doctor and you pay a $30 Doctor Visit CO PAY (no deductibke applies usually to this coverahe n most plans)

Then you have blood drawn and x-rays taken, Urine analysis and then sent out for More tests and have an extensive Heart/Lung Exam involving a hospital stay.

You pay the 1st $500 (individual deductible of $500) of all bills, then you are covered for 80% of the BILLLABLE amount over $500 until you spend OUT OF POCKET $5000 (lets say that's your INDIVIDUAL OUT OF POCKET MAX)

then after you spend $5000 (doctor copay, labs, hospital stay) you are covered for the rest of the Calandar year up to the policy Lifetime MAX.... Usually a couple of Million dollars...

The same way works for the family deductible.... as long as at least one person meets the family deductible, or a couple of people combine to meet either the FAMILY deductible , lets say $1500 in this case and the Out of Pocket FAMILY Max of $10000, then the WHOLE family qualify's at the deductible level and at the Out of pocket Max level.... until the end of the calandar year....

the HSA plans are good for people who can take on a $8000 or so Bill in any given year for health expenses... th HSA is a plan for people with INCOME to cover a $10000 or less out of pocket cost, and then the PLAN covers 100% of your BILLS....

The good thing is that if you are healthy, do regular check ups, have enough funds to go for a plan like this, you get to put the $ you would normally spend on a Traditional plan, and "Invest it" like you would a 401k in a separate account in a Bank.

if you stay healthy, you make regular payments into this "Fund" and over the course of several years build up a nice acount that earns interest, and will be used to cover medical bills.

Rather then the Insurance company taking on the all the risk, you take on more of the risk and get a lower monthly rate as a result.

Doctors, Lawyers, Bankers with families and at least $150K or more a year in Income are usally good clients for a policy of this type...

Good luck

your annual deductible is the amount you have to pay every year before insurance kicks in
coinsurance percentage is usually 80/20 on most plans meaning the insurance company will pay 80 percent of the bill and you are responsible for the remaining 20 percent these percentages can vary depending on the policy you choose
out of pocket maximum is the limit on what you will have to pay every year sometimes your deductible is included in the amount and sometimes it isnt the policy will tell you
lifetime coverage is the maximum amount the policy will pay for all medical expenses in your lifetime

visit this website http://theinsurancegroup.blogspot.com

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