When choosing a plan, it’s a good idea to think about your total health care costs, not just the bill (the “premium”) you pay to your insurance company every month. Show
Other amounts, sometimes called “out-of-pocket” costs, have a big impact on your total spending on health care – sometimes more than the premium itself. Beyond your monthly premium: Deductible and out-of-pocket costs
How to estimate your yearly total costs of careIn order to pick a plan based on your total costs of care, you’ll need to estimate the medical services you’ll use for the year ahead. Of course it’s impossible to predict the exact amount. So think about how much care you usually use, or are likely to use.
Total costs & “metal” categoriesWhen you compare plans in the Marketplace, the plans appear in 4 “metal” categories: Bronze, Silver, Gold, and Platinum. The categories are based on how you and the health plan share the total costs of your care. Generally speaking, categories with higher premiums (Gold, Platinum) pay more of your total costs of health care. Categories with lower premiums (Bronze, Silver) pay less of your total costs. (But see the exception about Silver plans below.) So how do you find a category that works for you?
Remember... it is okay to not be okay.Health care in the United States can be very expensive. A single doctor’s office visit may cost several hundred dollars and an average three-day hospital stay can run tens of thousands of dollars (or even more) depending on the type of care provided. Most of us could not afford to pay such large sums if we get sick, especially since we don’t know when we might become ill or injured or how much care we might need. Health insurance offers a way to reduce such costs to more reasonable amounts. The way it typically works is that the consumer (you) pays an up front premium to a health insurance company and that payment allows you to share "risk" with lots of other people (enrollees) who are making similar payments. Since most people are healthy most of the time, the premium dollars paid to the insurance company can be used to cover the expenses of the (relatively) small number of enrollees who get sick or are injured. Insurance companies, as you can imagine, have studied risk extensively, and their goal is to collect enough premium to cover medical costs of the enrollees. There are many, many different types of health insurance plans in the U.S. and many different rules and arrangements regarding care. Following are three important questions you should ask when making a decision about the health insurance that will work best for you. One way that health insurance plans control their costs is to influence access to providers. Providers include physicians, hospitals, laboratories, pharmacies, and other
entities. Many insurance companies contract with a specified network of providers that has agreed to supply services to plan enrollees at more favorable pricing. If a provider is not in a plan’s network, the insurance company may not pay for the service(s) provided or may pay a smaller portion than it would for in-network care. This means the enrollee who goes outside of the network for care may be required to pay a much higher share of the cost. This is an important concept to understand,
especially if you are not originally from the local Stanford area. If you have a plan through a parent, for example, and that plan’s network is in your hometown, you may not be able to get the care you need in the Stanford area, or you may incur much higher costs to get that care. One of the things health care reform has done in the U.S. (under the
Affordable Care Act) is to introduce more standardization to insurance plan benefits. Before such standardization, the benefits offered varied drastically from plan to plan. For example, some plans covered prescriptions, others did not. Now, plans in the U.S. are required to offer a number of "essential health benefits" which include Emergency services For our international population of students who might be considering coverage through a non U.S. based plan, asking the question, "what does the plan cover" is extremely important. Understanding what insurance coverage costs is actually quite complicated. In our overview, we talked about paying a premium to enroll in a plan. This is an up front cost that is transparent to you (i.e., you know how much you pay). Unfortunately, for most plans, this is not the only cost associated with the care you receive. There is also typically cost when you access care. Such cost is captured as deductibles, coinsurance, and/or copays (see definitions below) and represents the share you pay out of your own pocket when you receive care. As a general rule of thumb, the more you pay in premium up front, the less you will pay when you access care. The less you pay in premium, the more you will pay when you access care. The question for our students is, pay (a larger share) now or pay (a larger share) later? Either way, you will pay the cost for care you receive. We have taken the approach that it is better to pay a larger share in the upfront premium to minimize, as much as possible, costs that are incurred at the time of service. The reason for our thinking is that we don’t want any barrier to care, such as a high copay at the time of service, to discourage students from getting care. We want students to access medical care whenever it’s needed.
Important Insurance Terms and Concepts
Which type of health insurance covers the most people?Private health insurance is the predominant source of health insurance coverage in the United States.
Which type of health insurance is least expensive?Medicaid is the cheapest form of health insurance, but if you don't qualify, many other options are available. The Affordable Care Act (ACA) established tax subsidies to fund plans through the Health Insurance Marketplace.
What is a shield plan?An Integrated Shield Plan (IP) is an optional health coverage provided by private insurance companies. Consider the coverage you need based on the hospital ward and choice of hospitals you want to stay in, or you'll end up paying more premiums than necessary. If you are not sure you have an IP, check with CPF.
What is deductible and coinsurance?A deductible is the amount you pay for coverage services before your health plan kicks in. After you meet your deductible, you pay a percentage of health care expenses known as coinsurance. It's like when friends in a carpool cover a portion of the gas, and you, the driver, also pay a portion.
|