Friday, January 29, 2010

Spending more money on your health care than needed

Do you know your policy's health insurance benefits, deductibles, out-of-pocket limits and co payments? If you think you have an idea but somewhat unsure, then you may be spending more money on your health care coverage than what's actually needed.

Who manages your checking account? The bank, you, or both? The same analogy applies to your health care costs and benefits. Your health insurance is a partnership between you, the medical providers and the insurance company. If you are not involved in the equation, you could underminine yourself by paying a co payment that is not required, spending more than the out-of-pocket maximum expense, or exceeding the annual deductible.

Keep your medical expenditures intact.

An annual deducitble is a specific amount of money paid on as you go basis (doctor office visits) or in one lump sum (hospitalization), before the insurance company participates in the cost of your health care expenses. The carrier only becomes aware of the medical expenditures incurred when you file a claim against your annual deductible. Be sure to include your receipts and keep a copy for yourself. Be aware there are some medical benefits, whereby the annual deductible is not required for immediate access to the benefit.

Once you have met your deductible, then you are eligible to cost share with the insurance carrier for approved medical expenses. Assuming, you have an 80/20 policy, 80% of the costs will be paid by the insurance company and the remaining or 20% will be paid by you. Hence, for example, on a medical bill of $100, your share will be $20.

The cost-share or the 20% from the example given above has a maxium dollar amount or an out-of-pocket limit. Let's assume it is $2500. When your 20% equals $2,500, the good news is that the carrier becomes 100% responsible for the covered medical expenses up to the policy's lifetime maximum, if any. Be aware that co payments and deductibles are usaully not considered an out-of-pocket expense.

To summarize, the steps are, 1) meet your annual deductible, 2)cost-share up to the out-of-pocket limit, and 3) once you have met the prior steps in order of sequence, the insurance carrier covers 100% of the eligible medical expenses up to the applicable policy maximum.

Most insurance companies provide their membership access to online resource tools to assist their memberhsip with information about their health insurance benefits, claims or topics of interest. This is a superb way to manage your coverage or become aware instanteously of the claims made against your benefits by providers and the amounts paid or denied by the carrier.

Information is power. Be familiar with your annual deductible, out-of-pocket and benefits co payments and their applicabilty; particularly, to assure you're in balance with your share of the financial responsibilty.

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