Out of pocket costs (also called coinsurance)
Out of pocket costs are deductibles and co-payments that consumers pay to health care providers, usually at the time of service. Under the ACA, out-of-pocket limits apply to almost all health plans regardless of size or funding type, including all plans sold through a public insurance exchange. The only health plans that do not have out of pocket limits are those that the law defined as grandfathered plans. These are plans that existed when the law passed and that have not been revised since then. As soon as an insurer revises a grandfathered plan, the plan is no longer grandfathered and must meet the rules of the ACA that all health insurance plans must meet.
Co-pays or co-payments are fees that consumers pay to health care providers such as physicians or hospitals usually at the time of service although some physicians and other providers will bill consumers for copayments. Deductibles are a form of co-insurance, meaning the insured pays part of the cost of the insurance. Co-payments are another form of co-insurance. Deductibles are another form of co-insurance.
- Routine visit co-pays:Consumers pay a fee up front when they go to a routine doctor’s appointment.
- Prescription co-pays:Consumers pay a fee or a percentage of the cost of prescription medications, and the insured pays the remaining cost of the prescription, making medication more affordable.
- Emergency visit and hospitalization co-pays:Co-pays for hospitalization or emergency services are usually higher than co-pays for routine visits, but are still far less expensive than paying for the entire cost of a medical emergency or hospitalization out of pocket.
Deductibles are amounts consumers must pay out of pocket either at the time of service or via payment after receiving a bill from a physician, hospital, or other provider. Generally, consumers choosing plans will find that they must pay a higher deductible in exchange for a lower health care premium.
The ACA sets limits on deductibles, coinsurance and co-payments and these limits are called the out-of-pocket maximum or out-of-pocket limit. The out-of-pocket max is the most a consumer would pay during a policy period (usually one year) before the health insurance company would for all covered essential health benefits. This limit includes deductibles, coinsurance, co-payments, or similar charges and any other expenditure an individual must make for a qualified medical expense for the essential health benefits. Under the ACA, this limit does not include premium payments or balance billing amounts for non-network providers and other out-of-network cost-sharing, or spending for non-essential health benefits.
Essential health benefits
The ACA defines essential Health Benefits as set of health care service categories that each health plan must cover in the individual and small group markets, both inside and outside of the Health Insurance Marketplace. Included among the essential health benefits are items and services within at least the following 10 categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care. To be certified and offered on the Health Insurance Marketplace, all health insurance policies must cover these essential health benefits, and states that have expanded or that will expand their Medicaid programs under the ACA must provide these benefits to those newly eligible Medicaid beneficiaries. Under the ACA, each state can define its essential health benefits as long as they fulfill the minimum requirements of the 10 categories.
Types of health insurance plans
On the Health Insurance Marketplace, five different levels of plans are available. They are bronze, silver, gold, platinum, and catastrophic plans. Among bronze, silver, gold, and platinum plans, the premiums are lowest for bronze plans and deductibles are highest. Silver plans have slightly higher premiums and slightly lower deductibles, gold plans have still higher premiums and lower deductibles and platinum plans have the highest premiums and the lowest deductibles. Consumers shopping for coverage would do well to determine what they might pay in the coming year based on past experience and then determine if paying more in a monthly premium helps save money overall because the individual or family’s deductible would be lower. Some studies have shown, for example, that while most people shop on price based on the premium and choose bronze plans when many would be better off to buy silver plans.
Under the ACA, catastrophic plans cover all essential health benefits after the consumer reaches his or her out-of-pocket maximum ($6,850 for an individual in 2016) and they cover as many as three primary care visits per year with no cost-sharing, and, like all plans, preventive care is covered in full with no cost-sharing. But the insured with a catastrophic plan must pay for almost all other services until he or she reaches the out-of-pocket max.
Not all consumers can purchase catastrophic plans because they are designed for consumers under age 30 or those who are older than 30 but who qualify for a hardship exemption under the ACA. Such an exemption would be granted for an economic hardship and would exempt the consumer from the individual mandate, meaning the consumer would not need to purchase health insurance or pay a penalty for failing to do so. Catastrophic plans also are available for those whose health insurance policies have been canceled for failing to comply with the ACA. While catastrophic plans are available from private insurers on the federal and state health insurance exchanges, only the Health Insurance Marketplace can issue a hardship exemption.
Home health care services coverage
Health insurance may cover the cost of home health care services for people who require them.
- Full-time aide:If a patient needs a full-time health care worker to assist with basic self-care, the health insurance plan may cover the cost of the aide.
- Visiting nurse:Some insurance policies cover the cost of a visiting nurse who checks with a patient at home on a regular schedule, such as a daily or weekly.
- Home health care equipment:Some health plans cover the cost of equipment such as rails on bathtubs or blood sugar testing apparatuses that allows patients to manage their health care condition at home.
Long-term care insurance
Long-term care insurance covers health care services that are needed over many months or years, such as personal and custodial care in an insured person’s home, a nursing home, a long-term care facility, a community organization, or other setting. These policies pay insured individuals for assistance with activities of daily living such as bathing, dressing, and eating.
As an expert in healthcare financing and insurance, I bring a wealth of knowledge and experience to shed light on the concepts discussed in the provided article. Over the years, I have closely followed developments in the healthcare sector, staying abreast of policy changes, insurance regulations, and the evolving landscape of out-of-pocket costs.
Now, let's delve into the key concepts outlined in the article:
Out of Pocket Costs (Coinsurance):
Definition: Out of pocket costs refer to deductibles and co-payments that consumers pay to healthcare providers, typically at the time of service.
Expert Insight: These costs are essential components of health plans and are regulated under the Affordable Care Act (ACA). It's crucial to note that almost all health plans, regardless of size or funding type, are subject to out-of-pocket limits mandated by the ACA.
Definition: Co-pays or co-payments are fees paid by consumers to healthcare providers, such as physicians or hospitals, usually at the time of service.
Expert Insight: Co-pays are a form of co-insurance, representing a share of the cost that the insured pays. They vary depending on the type of service, with routine visit co-pays, prescription co-pays, and emergency visit/hospitalization co-pays.
Definition: Deductibles are amounts consumers must pay out of pocket either at the time of service or after receiving a bill from a healthcare provider.
Expert Insight: Deductibles play a role in the cost-sharing structure of health insurance plans. Consumers often face a trade-off between higher deductibles and lower monthly premiums when choosing a plan.
Definition: The out-of-pocket max is the limit set by the ACA on deductibles, coinsurance, and co-payments. It represents the maximum amount a consumer would pay during a policy period.
Expert Insight: This limit ensures that consumers are not financially burdened beyond a certain point, offering protection against excessive healthcare costs.
Essential Health Benefits:
Definition: Essential Health Benefits (EHBs) are a set of healthcare service categories that all health plans must cover, as defined by the ACA.
Expert Insight: These benefits, spanning various categories such as emergency services, mental health, and prescription drugs, ensure comprehensive coverage for individuals and families.
Types of Health Insurance Plans:
Overview: Health Insurance Marketplace offers five plan levels: bronze, silver, gold, platinum, and catastrophic plans.
Expert Insight: Each plan level comes with different premiums and deductibles. Consumers should carefully evaluate their healthcare needs to determine the most cost-effective option.
Definition: Catastrophic plans are designed for individuals under age 30 or those qualifying for a hardship exemption. They cover essential health benefits after reaching the out-of-pocket maximum.
Expert Insight: Catastrophic plans provide a safety net for major healthcare expenses but require individuals to cover most costs until reaching the out-of-pocket max.
Home Health Care Services Coverage:
Overview: Health insurance may cover full-time aides, visiting nurses, and home health care equipment.
Expert Insight: Coverage for home health care services is crucial for individuals requiring ongoing care at home. Insurance policies may vary in the extent of coverage provided.
Long-term Care Insurance:
Definition: Long-term care insurance covers extended healthcare services needed over months or years, including personal and custodial care.
Expert Insight: These policies help individuals cover the costs associated with activities of daily living and are particularly relevant for long-term care needs.
In conclusion, a nuanced understanding of these concepts empowers individuals to make informed decisions regarding their health insurance coverage, ensuring financial protection and access to essential healthcare services.