Health insurance overview

Billing process and terms

You and your insurance company share the costs of care that your policy covers. Your policy explains exactly who pays for what. Call the customer service number on your insurance card to find out how your policy works. Here are some guidelines, however:

1. You give the doctor or hospital your insurance card at the time you seek medical care.
2. You pay the doctor or hospital any co-payment required by the insurance plan.
3. The doctor bills the insurance company. You must bill your insurance if the doctor doesn't do this for you.
4. The insurance company sends you an explanation of benefits. It lists: what the doctor or hospital charged, the maximum amount the insurance company allows for that procedure, what the insurance company paid as its share, and your share of costs.
• Note: If you have more than one group (through an employer) health insurance plan, insurance companies coordinate payment of benefits. This means that the companies determine how much each of them will pay toward your medical treatment.
5. You pay your share of the bills.

Here are some common terms:

• Allowed (eligible) expenses:

  This is the most the insurance company allows for any covered service. This may be less than the amount actually billed. If you use certain doctors or other providers that aren't in your plan's network, you may have to pay the difference between the amount billed and the amount allowed. This is in addition to your share of other costs for any covered service.

• Co-payment:

  The amount your insurance plan requires you to pay for each medical service visit. For example, an insurance company may require you to pay $10 for a doctor office visit.

• Coinsurance:

  The percent you pay for medical care that is covered by your policy. For example, if your insurance company pays $100 for a doctor visit and your share is 20 percent then you would pay $20 and the insurer would pay $80. You may have to pay the total $100 if you have not paid all of your deductible.

• Deductible:

  The amount of money you pay for medical care before the insurance company begins paying.

• In-network:

  These doctors, hospitals, and other providers sign a contract with your insurance company and agree to accept the amount allowed by the policy as full payment.

• Premium:

  The monthly bill you pay to have insurance, regardless of whether you go to the doctor.

• Out-of-network:

  These doctors and other medical providers may charge more than the allowable expense. Once your insurance company pays its share, you are responsible for the balance. This balance is in addition to deductibles and coinsurance amounts you pay. Sometimes the insurance company pays the entire claim to you instead of paying the out-of-network provider. In that case, the medical provider can require full payment of all charges from you.

• Out-of-pocket maximum:

  The most that you must pay out-of-pocket each year. Once you reach the out-of-pocket maximum in your plan, then the insurance company pays 100 percent of allowed expenses.

*Note: If you use an out-of-network doctor, the $300 becomes part of the $580 you pay.

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