Health Insurance 101

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Premiums = Cost of having insurance

Deductible:
The amount you have to pay before the insurance kicks in
Co-insurance:
The % of costs you pay after meeting your deductible
Co-payments:
A fixed amount for a covered service
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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

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Jane has to sleep overnight in the hospital.
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She receives a bill from the hospital for $100,000.
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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% co-insurance until she reaches her out of pocket maximum of $5,000.
Let’s break it down
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Hospital Bills: $100,000

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

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Deductible: $3,000

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

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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

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