Understanding Your Health Insurance
Written by: Amanda Levison, M.S., LMHC, LPC, CCBT
Insurance can be confusing, with different policies and different terms like deductibles, co-pays, and coinsurance. We often do not understand these terms until we seek medical attention and end up having to pay, even though we have insurance. So what do these different terms mean? Our Harrisburg PA therapist breaks down a few of these things to better understand your insurance policy and what it means for your treatment.
A premium is what you, the insured, will pay each month, even if health insurance is not used, to maintain a subscription with the health insurance company. Since contracts with health insurance companies last one year, this is what you will pay each month for one year.
These costs are anything that insurance does not cover and fall to the insured to pay. These costs include deductibles, co-payments, and coinsurance.
A deductible is a yearly amount that the insured must pay before the insurance begins to pay for services. For example, someone with a $1,500 deductible must pay that amount in services before the insurance covers future services.
A co-pay is a flat fee you pay for services. Your insurance will determine what amount you will pay for services or prescriptions. This should be stated in your policy.
Once the deductible is met, insurance will cover a percentage of your visit cost. The remaining percentage is left for the insured to pay. The percentage that coinsurance covers is determined by the individual policy.
Billed Amount/ Billed Charges
The billed amount is the charge the healthcare provider sets for a given service. The insurance provider will negotiate this charge with the provider, so you and the insurance provider will pay a discounted rate.
Allowed Amount/ Allowed Charges
Essentially, the authorized amount is the rate your insurance company has negotiated with your healthcare provider to be included in their network. They agree to a rate that is lower than what you would most likely pay without insurance coverage. The allowed amount is the end negotiated rate of the billed amount.
The claim will be the form that the healthcare provider submits to the insurance company for payment on your service.