How to Understand Health Plans in California
This may be the best explanation you ever get of the different California health insurance plans you can choose from. This is just a simplified look at the plans, so make sure to check out the details of any plan you might be interested in. At the end of the article, we'll talk about the plans that aren't as simple as this, but this will help with 80% of the plans on the market. Now...
There are three main types of plans for health insurance in California.
- Office consultation. Most health insurance plans will require you to pay a copay or coinsurance for office visits. Most of the time, the copay or coinsurance doesn't count toward the plan's main deductible. For an office visit, a copay is a set amount, like $30. Co-insurance is a fixed amount, like 30% for an office visit. Co-insurance would be something like:
Visit to the office: $100 fee
Rate agreed upon: $ 60 fee
Co-insurance: 30 percent
In this case, the subscriber would pay $18, which is 30% of the agreed-upon rate of $60. The negotiated rate is the price that a doctor or other provider who is part of the network has agreed to charge. This is usually true for plans like PPO.
The copay or coinsurance for the office is only for the consultation. In addition to the consultation, if the doctor does lab tests, procedures, or other services, these costs are covered in the third section and will be added to the copay or co-insurance.
One of the most important parts of your California health insurance quote for Individual, Family, or Small Group insurance is the office visit. Most of the time, you will see "$25" or "30%" in the results.
A quick note. With high-deductible plans that can be paid for with an HSA, the office visit consultation counts toward the main deductible. This means that you have to pay the deductible before you can get a copay or co-insurance benefit. Even if the benefit is subject to the deductible, you will get negotiated rates if you see a provider in the network. In the case above, for example, you would pay the $60 as part of your deductible. Some plans don't cover visits to the doctor's office at all. Most of the time, they are the least expensive plans that cover hospital stays or major accidents.
- Coverage for prescription drugs and health insurance in California. Most plans have copays that are separate from the main deductible and cover the cost of prescriptions. Most plans on the market today make a difference between generic and brand-name drugs.
Insurance companies have a list of the drugs they think are effective and cost-effective. This list is called a "formulary."
Generic drugs are cheaper, and your copay is usually less (around $10 on average), and there is no deductible.
Brand formulary drugs are usually patented drugs that are heavily advertised and marketed, so they are more expensive. In essence, they are more recent drugs. Most of the time, these drugs have a higher copay (around $30 on average) after a separate brand-name deductible is met. This deductible is usually between $250 and $750 per member per year for individual family health insurance in California and between $150 and $250 for small group health insurance in California. In a family plan, the deductible is usually per person and starts over on January 1st, no matter when the plan starts. Once you've paid for the brand drug up to the amount of your deductible, you'll only have to pay a copay ($30 in this case) for any other brand formulary drugs.
Brand Non-Formulary is sometimes a third category. This means that the drug is very expensive and there are other options that are less expensive. Most plans require you to pay a percentage of the cost, so with Brand Non-Formulary, you may have to pay quite a bit more out of pocket.
You can save money by asking your doctor if there is a generic version of what you need. Some plans don't cover brand-name drugs at all, so it's important to double-check. This is because it's becoming more common for medications that cost tens of thousands of dollars to treat rarer conditions.
- Most of the other things. Most other coverage benefits (labs, x-rays, emergency, surgery, hospital) are usually subject to the main deductible. This is another thing that is on the list when you ask for a quote on health care in California. On average, the amount of the deductible ranges from $0 to $5,000. Most of the time, the deductible is per person (or up to two people in a family), and it starts over on January 1. When you see "2 member max," it means that if two family members meet their deductible in a given year, the other family members don't have to.
One thing to keep in mind is that HSA plan deductibles add up. This means that the family deductible, which applies when two or more people are on the same policy, is not met until the family deductible is met. For example, if the deductible for an individual is $2400 and the deductible for a family is $4800, one person on the family plan would not meet the deductible until the $4800 was paid. The deductible for other family members would also be met. All of the people on the family plan are putting their money toward one $4800 deductible.
Once you've paid the deductible, you either pay a co-insurance percentage or the insurance company pays for everything. For example, if your deductible is $2500 and your co-insurance is 30%, you will have to pay a maximum of $7500 out of your own pocket. Let's say your hospital bill is $80,000. (in-network for covered benefits). You would pay the first $2500 out of your own pocket. After that, you would pay 30 percent of what you owed until you paid another $5000. Basically, you will pay the most, which is $7,500, and the carrier will pay the rest, which is $72,500. With some plans, the maximum amount you have to pay out of pocket is on top of the deductible. When you get a quote for health insurance, you will also see the deductible and the most you will have to pay out of pocket.
With the Office Visit, Prescription Coverage, Main deductible, and Max out of Pocket, you can now read the health quote results with confidence.
