Navigating Today’s Insurance Model and Why Paying Upfront Can Save You Money!
In today’s healthcare system, patients have become independent consumers of their own health. They choose who they want to see and when they want to see them. This makes it ever more important for you the consumer to understand what you are actually paying for when you enroll in your employer’s health insurance plan or when you purchase a plan independently because of the Affordable Care Act. Depending on the plan you invest in you may be paying more money upfront or likely will pay it on the back end when you schedule an appointment with a healthcare provider. From premiums, to deductibles, to coinsurances and copays, it often becomes difficult to navigate the insurance model. Likely between paycheck deductions and what you actually pay when you see a provider, it is a lot more than you anticipated. Let’s breakdown the different terminology regarding your health plan so you can become even more independent when choosing the right care for you.
Premium – A premium is the amount of money you or your employer pays each month to keep you covered or insured each year. Often times, the employer will pay a premium and a portion of that premium will be deducted from your paycheck. In 2015, the average premium for an individual insurance premium was $6,251 and family coverage was $17,545. 1
Deductible – A deductible is the amount of money you have to pay your healthcare provider before your insurance starts picking up the bill. This means, if you have a $5,000 deductible, then you will have to pay the first $5,000 dollars of your healthcare bills before the insurance starts paying. The exception is usually your annual physical in which your insurance will cover. In general, the higher the premium, the smaller the deductible. Most plans are moving towards higher deductibles in an effort to keep the premiums down.
Coinsurance – A coinsurance is the amount of money you owe to a healthcare provider once your deductible has been covered. Yes, that’s right! So you have a premium which comes out of your paycheck, then you have a deductible, which you have to pay prior to your insurance covering your bills, and then some individual will have a coinsurance which is usually in percentages of the bill. For example, you may have a 20% coinsurance. If your bill to see a provider is $200.00, then you will have to pay $40.00 in additional to everything else you have already paid.
Copay – A copay is the amount you pay each time you see a medical provider. Depending on your plan you may have either a copay or coninsurance, or a combination of both depending on the service. Copays can range anywhere from $5.00 to $75.00. Every insurance plan is different.
With all of these potential additional fees associated with an insurance plan, it actually may be more cost effective for you to PAY CASH for your physical therapy visit. Let’s explain. Physical therapy is billed in 15-minute increments or units (and actually, if you hit 8 minutes, you actually get an additional unit). An average appointment with a physical therapist is between 3 and 5 units. Depending on the service you receive, an average unit will range from $40.00 to $60.00. So an appointment will cost as low as $120.00 and as high as $300.00. If you have a high deductible health plan, YOU are responsible for that bill. At Somma PT & Performance, we charge a flat rate for all appointments in which you see a physical therapist for 60 minutes (4 units) of one-on-one care. There are no surprises with your bill and our visit price of $109.00 is lower than the average low. Additionally, you can submit for reimbursement from your insurance company and there is a chance they will reimburse a portion of the visit price or at least put that money towards your deductible. So when you are considering physical therapy services, consider paying cash upfront and it may actually save you money in the long run.
References
1. How Much Should I Pay For Healthcare? Introducing the Healthcare Affordability Ratio https://www.financialsamurai.com/how-much-should-i-pay-for-healthcare-affordability-ratio/