Health insurance is a necessity for couples looking to control their out-of-pocket medical expenses and safeguard against unexpected health costs. Unfortunately, the murky waters of the health care system confuse even the smartest of young couples. Terms like coinsurance, deductibles, co-pays, premiums and covered services muck up the waters. Don’t just sign for the traditional 80/20 medical plan without understanding what the plan entails.
Coinsurance
The “80/20” part of the health plan refers to coinsurance. Coinsurance is the amount of money you are going to pay for covered services assuming you have no deductible. When your wife goes in to have a baby, you will pay for 20 percent of the total cost of the bill. Your health insurance pays for 80 percent of the total cost of the bill. Most coinsurance plans do cap the total amount you pay with out-of-pocket limits. You would pay 20 percent of your total healthcare costs until you reach your out-of-pocket limit. Then the insurance pays 100 percent of your medical expenses.
Deductibles
A deductible is the amount of money you are going to pay out of pocket before any insurance kicks in. So with an 80/20 plan with a deductible, you pay the deductible first. Then insurance kicks in and you pay the 20 percent of the bill up to your out-of-pocket maximum. Choosing a higher deductible plan often lowers your personal monthly premium or the amount of money you pay out-of-pocket for your health plan.
Premiums
Your health care options are varied depending on your specific situation. The cost or premium for your health insurance plan depends on the coverage you select during enrollment. High deductible plans with high coinsurance are often cheaper than low deductible low coinsurance plans. The 80/20 plan is a common health care plan but you may save money on premiums by changing the numbers to 70/30 or even 50/50. Just remember, you’ll pay more in the case of an accident or unexpected medical necessity.
Covered Services
The 80/20 coinsurance coverage only works on covered services. Make sure the health care service you are going to need such as maternity is covered by your health plan. When it is not covered, you pay the entire cost of the procedure or medical bill. When you sign up for your health insurance, they send you a packet listing the details of your health plan. Make sure to keep this document so you know what medical services are covered by your insurance. When in doubt, call your health insurance company to verify a procedure is covered before opting for it.
