Insurance Terms Defined

Being a doctor in a small office I’ve had the opportunity to work and learn numerous aspects of running things.  Insurance is the primary aspect I hear questions about on a daily basis.  It seems as though each day insurance policies are changing. Regardless if you have a brand new policy midyear, or have maintained your current policy, there are a handful of terms you should understand.

All medical offices have a fee schedule.  A fee schedule is a list of services and the amount billed to an insurance company.  These fee schedules are determined based on location and other aspects which as a patient you could care less about. On a very basic level, paying for insurance gives you the privilege of paying that companies rates.

Medical office rate for exam: $100
Blue Cross Blue Shield Rate for same exam: $80

If you have BCBS insurance, you can only pay up to $80 for that exam.  You get the $20 discount.

Here are a list of other terms you should be familiar with.

Deductible: A specific dollar amount that your health insurance company may require that you pay out-of-pocket each year before your health insurance plan begins to make payments for claims.  Not all plans require a deductible, but a handful do.  It is important to note that some plans also have a family and/or individual deductible.

CoPay (Co-Payment): A specific charge that your health insurance plan may require that you pay for a specific medical service or supply.  For example, for office visits (exams), or prescription drugs you may have a $20 Co-payment.  That is the amount you are responsible for and your insurance pays the rest.

Co-Insurance: Coinsurance is the term used by health insurance companies to refer to the amount that you are required to pay for a medical claim, apart from any co-payments or deductible. For example, if your health insurance plan has a 20% coinsurance requirement (and does not have any additional co-payment or deductible requirements), then a $100 medical bill would cost you $20, and the insurance company would pay the remaining $80.

Over the last few years I have noticed an increasing number of variable insurances.  This means that for each service provided, the patient has a different coverage.  In a chiropractic office, an example would be:

Office Visit (exam): $20 Co-payment
Adjustment : 20% Coinsurance
Physical Therapy: $20 Co-payment
X-rays: 20% Coinsurance

In most cases, a service with a co-payment, will not require you to fulfill your deductible, but a service with coinsurance WILL require you to fulfill your deductible.

Here is an example to help explain.  Patient X has a BCBS Plan with the following:

$500 Deductible (has met $0.00 of $500)
$20 Copay for Office Visits
20% Coinsurance for all other services

Patient X visits our chiropractic office for an exam, x-rays and adjustment.  Blue Cross Blue Shield rates for those services are:

Exam (Office Visit): $100
X-rays: $100
Adjustment: $40

Patient X Will Owe:
Exam (office visit): $20 Copay
X-rays: $100 (being billed towards deductible)
Adjustment: $40 (being billed towards deductible)
Total: $160

Patient Z visits our chiropractic office with the same coverage and same services EXCEPT Patient Z has met all $500 of his/her deductible.

Patient Z will owe:

Exam (office visit): $20 Copay
X-rays: $20 (20% coinsurance of $100)
Adjustment: $8.00 (20% coinsurance of $40)
Total: $48.00

Insurance can be a bit tricky and we recommend you get familiar with your plan and ask questions.  As a service to all of our patients we pre-verify your coverage for any services offered at our office so you are aware of what the cost will be for you.

Feel free to post questions that I can answer, especially if you were unable to follow any of the examples!  I hope you take away a few basic terms to help make the transition with insurance an easier one in 2017!