Insurance Basics: Deductible & Coinsurance

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PostPosted: Sat Nov 13, 2010 5:56 pm   Post subject:   

If you have a PPO with coinsurance, and your physician is in the network, then the scenario is slightly different. The physician has contracted to receive a specific amount of money for his services. If your coinsurance is 70/30, then you will pay 30% of the prenegotiated rate for "covered" services.



I think I got it...So the provider has to be within the insurance company's ppo network in order to be reimbursed at 70/30 for services they provide right?

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PostPosted: Sat Nov 13, 2010 5:57 pm   Post subject:   

Insurance companies have to have their own network of providers under the policies the insurance companies have right?

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PostPosted: Sun Nov 14, 2010 3:26 pm   Post subject:   

Not sure exactly what question you are asking Nicholas. But in HMO and PPO plans, each insurance company creates its own network of providers (it is not uncommon for physicians to be members of four or five different HMO/PPO networks).



The HMO/PPO then publishes its list of providers for the subscribers -- used to be mini-telephone book documents, but now it's all posted online. If in an HMO, one must voluntarily select a PRIMARY CARE PROVIDER (MD, DO, RNP, PA) as described by the plan. The PCP may be changed as often as once per month (effective the first of the following month in most cases). If not voluuntarily selected, the HMO will assign the subscriber to one close to the person's residence address. That PCP must provide most patient services or obtain referrals to network specialists for the subscriber. HMO primary care providers agree to accept the HMO's "negotiated" rates (kind of like having a gun held to your head and being told what you will accept) plus the subscriber's copay at the time of service. The additional "carrot" for the HMO PCP is something called "capitation" -- a regular monthly payment for each subscriber enrolled in their practice (in SoCal in 2010, typical capitation rates for an MD are: Male adult, $20-$22, Adult female $23-$27, child under age 13, $20-$25, child age 13 - 18, $22-$27) and they get the money whether they ever see the patient or not. Pays for rent, utilities, an office secretary or other staff person, but is not expected to be the PCP's own compensation. Service billings for patient visits and copayments take care of that.



In a PPO, the subscriber is not limited to a PCP (although they are encouraged to establish a similar relationship), and they are not limited to the network of physicians. They may choose to go outside the network -- such as when the doctor they've been seeing for years is not a member of the network -- but doing so always costs more money out of pocket, because in the network, the providers have agreed to a contracted rate of payment from the PPO plus a copayment from the subscriber at the time of service. There is NO CAPITATION in a PPO, but physicians receive a higher level of compensation on a FEE-FOR-SERVICE basis. They are allowed to bill for more services than an HMO physician. But not much more. And they don't get paid a lot more either.



Honestly, when I see the pitiful amount of money an HMO or PPO physician or surgeon (or hospital or clinic/laboratory) gets from the HMO/PPO compared to the premiums people are paying, I wonder why any young person in America would want to become a doctor. Leave medical school $300,000+ in debt and have to work for at least 20+ years as an HMO/PPO physician to pay it off. Not appealing to me in the least.



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PostPosted: Thu Nov 18, 2010 1:23 am   Post subject: 80% coinsurance after deductible  

I would like to know 80% coinsurance after deductible means


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PostPosted: Sat Nov 20, 2010 1:27 am   Post subject:   

If we're talking about health insurance, then "80% coinsurance after the deductible" means that after you've satisfied the stated deductible in your policy, the insurance company will pay 80% of your covered claims -- up to the stated "stop loss" or "out-of-pocket" limit. After that, covered claims are paid 100%.



Let's say you have a medical expense of $1,000. If your deductible is $500, you pay that amount. Of the remaining $500 loss, your insurance would pay $400, you pay the other $100. When your next claim comes in, the insurance company will pay 80% of that.



On January 1 of the next year, everything starts over again.



If you're talking about homeowner's insurance and "coinsurance", the concept is very different.



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PostPosted: Sat Nov 20, 2010 1:40 am   Post subject:   

yea makes full sense.

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PostPosted: Sun Dec 19, 2010 8:35 pm   Post subject: insurance question  

On a $20,000 in hospital medical bill for an individual with a policy that says $2,500 individual deductible with Maximum out of pocket expenses in calendar year of $5,000 plus, 70/30 coinsurance for inpatient / surgery mean to mean in simple to understand terms?



Thanks Rich


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PostPosted: Mon Dec 20, 2010 7:01 am   Post subject:   

$20,000 total bill

- 2,500 deductible

_______



$17,500 amount subject to coinsurance

x 0.30 coinsurance percentage

_______



$ 5,250 out of pocket expense



$ 5,000 stop loss/maximum out of pocket expense means the insurance company will pay the additional $250 plus 100% of all additional (later) medical expenses for the insured in the year.



Having said this, some policies include the deductible in the total out of pocket expense for the stop loss. But I doubt that is the case in your policy. It most likely will work as I have illustrated.



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PostPosted: Fri Dec 31, 2010 12:18 pm   Post subject: Health insurance  

BCBs plan 90/10 plan. has a $250.00 deductible plus

a 10% coinsurance in Florida.The broker is pushing this plan. I found Preferred Medical of Coral Gables that has

no deductibles nor coinsurance. But the broker said the

company has problems. No complaints filed in Tallahassee concerning this company

who do I believe


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PostPosted: Fri Dec 31, 2010 4:47 pm   Post subject:   

Quote:
the broker said the company has problems




Ask the broker to prove his allegations, or talk to someone at Preferred Medical. I don't know anything about them, but I cannot find anything negative about them either. For what it's worth (not much), BBB of Coral Gables rates Preferred Medical Plan, Inc. "A+". Probably wouldn't be the case if they "had problems".



It is a violation of most states' insurance laws to "defame" an insurance company in a manner that causes persons to not do business with them. The reason your "broker" may have made the remark is that he does not represent Preferred Medical Plan, Inc., or wants to earn a (higher?) commission by enrolling you in the BCBS plan.



If the broker cannot document his accusation, then you should turn and RUN from that person, and file a complaint about them with the state Dept of Insurance. He may not have your best interest in mind . . . as the law requires.


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PostPosted: Tue Jan 11, 2011 6:05 pm   Post subject: Full roof replacement  

Company to be given work by insurance company has asked us for the deductible amount before work has begun. Is this unusual ? Work should be finished before deductible is paid I believe.


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PostPosted: Tue Jan 11, 2011 6:08 pm   Post subject: Full Roof Replacement  

Company has asked for payment of deductible even before roofing has begun (which will not be until spring due to wether conditions). Why???


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PostPosted: Wed Jan 12, 2011 2:48 am   Post subject:   

If the contractor is doing the job for the full value of the insurance company's estimate, then you owe the deductible. When it gets paid is between you and the contractor. Consider it a deposit on the contract. No deposit, no contract -- prices could change. Then where will you be?



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PostPosted: Wed Apr 06, 2011 12:35 pm   Post subject: medicare  

i have part a and b and no other ins. i am 75 yr old if my bill is 500.00 how much will i have to pay? will it be less when i meet my deductible?


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PostPosted: Wed Apr 06, 2011 3:18 pm   Post subject:   

You must be talking about Medicare Parts A&B. Part A primarily covers in-patient hospitalization (no doctor's bills). Part B primarily covers physician's and surgeon's and outpatient hospital expenses.



If you are hospitalized in 2011, there is a deductible of $1132 per benefit period (day of admission to 60th day after discharge from hospital), and medically-necessary services are generally covered 100% during the first 60 days of hospitalization.



If you see a doctor (in or out of the hospital), under Part B, there is a one-time deductible per calendar year ($162 in 2011) that is payable before Part B benefits begin. Once the deductible is satisfied, most Part B medically-necessary services are covered on an 80% (Medicare) / 20% (Medicare beneficiary) basis when using a "Medicare-approved" physician/surgeon (with additional limitations on billable amounts imposed by Medicare). You will pay a higher percentage of the bill from a non-approved physician/surgeon. You cannot be billed for any amount that exceeds Medicare's "approved amount" for any service (except that a non-approved provider may bill up to 115% of the approved amount, but Medicare only pays 80% of 90% of that amount -- very confusing, right?).



If you were not hospitalized, but simply saw a physician or went to the emergency room at a local hospital, and you have not had any other medical appointments in 2011, then you will be responsible for the $162 deductible, and about $68 (20% of the $338 difference), or total out of pocket expense of about $230. Future similar bills will be paid on the 80/20 coinsurance basis.



You might be able to significantly reduce your out of pocket expenses by enrolling in a Medicare Advantage plan in 2012 (open enrollment begins in November). You may be eligible to enroll in a Medicare Advantage plan (now until May 15), in which case your coverage under that plan would begin on July 1. It will not cover expense incurred prior to July 1. Talk to a local insurance agent about the available plans in your area.



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