Health Insurance 101

Premiums = Cost of having insurance

The amount you have to pay before the insurance kicks in


The % of costs you pay after meeting your deductible


A fixed amount for a covered service

$20: PCP
$40: Specialist


Out of Pocket
Maximum $5,000

Once this is met,
all medical services are covered at 100% for the rest of the year.

How does it work?See below

Jane has to sleep
overnight in the hospital.

She receives a bill
from the hospital
for $100,000.

Jane calls FD National and they review her Explanation of Benefits, which shows Jane is only responsible for $5,000.

According to Jane’s insurance policy, for her hospitalization benefit she must meet her $3,000 deductible and then has 20%
until she reaches her out of pocket maximum of $5,000.

Let’s break it down

Hospital Bills: $100,000

Negotiated Rate: $70,000
Rate that Providers have with the Insurance Company

Deductible: $3,000
Co-insurance: 20% (67,000 x 20%) = $13,400

Jane’s insurance says her Out of Pocket Maximum is $5,000.
So Jane would pay $3,000 in deductible and $2,000 in co-insurance and now for the rest of the year, Jane’s medical coverage is 100% covered.

Insurance company pays: $65,000