When your loved one is ready to get the help he or she needs it’s important to understand how and what your insurance covers. Here is some helpful information about understanding this process.
Deductibles, Out-of-Pocket, Coinsurance, and Copays
- Deductible is the amount of money you pay for eligible medical expenses in a calendar year. After deductible is met, you pay nothing or your share the remaining costs with your insurance company up to out-of-pocket maximum.
- Your Out-Of-Pocket Maximum is the most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance, your health plan pays 100% of the costs of covered benefits.
- Coinsurance is a health care cost sharing between you and your insurance company. If your medical expenses in a calendar year excess out-of-pocket limit, then your insurer covers all the remaining costs.
- A Copay is a fixed amount ($20, for example) you pay for a covered health care service after you’ve paid your deductible.
- Let’s say your health insurance plan’s allowable cost for a doctor’s office visit is $100. Your copayment for a doctor visit is $20.
- If you’ve paid your deductible: You pay $20, usually at the time of the visit.
- If you haven’t met your deductible: You pay $100, the full allowable amount for the visit.
This may be confusing, so let’s do an example:
Let’s say your son needs treatment with an allowable cost of $20,000, and the following figures apply to your health insurance plan.
- Insurance Deductible: $1,300
- Coinsurance: 20% of remaining cost
- Out-of-pocket Maximum: $4,400
$1,300 (deductible) + $3,740 (20% coinsurance on the amount that is left after the deductible; $18,700) = $5,040 Total
But, your out-of-pocket maximum is $4,400. Your insurance company pays all covered costs above $4,400 — for this treatment and any covered care you get for the rest of the plan year.
Understanding insurance “allowable rates” and “billable rates”
Understanding the difference between the allowed amount the insurance pays for treatment and the billed amount the provider is vital to understanding patient responsibility. Often times providers will accept an insurance policy based on the allowed amount but have a set billed amount they assess for every patient. It is the policy of The Shores to accept the allowable amount from the insurance company and not bill any remainder to the client or responsible financial party.
- Billed amount: is the Amount charged for each service performed by the provider. In other words, it is the total charge value of the claim. The billed amount for a specific procedure code is based on the provider. It may vary from place to place. It is not common across all the states.
- Allowed amount is the maximum reimbursement the member’s health policy allows for a specific service. It is the maximum dollar amount assigned for a procedure based on various pricing mechanisms. Allowed amounts are generally based on the rate specified by the insurance. This amount may be:
- A fee negotiated with participating providers
- An allowance established by law
- An amount set on a Fee Schedule of Allowance (Insurance)
If the billed amount is $100.00 and the insurance allows $80.00 then the allowed amount is paid ($80.00) and no further amounts are due from the client or loved ones.
Cash Pay Option
Often times a loved one does not have insurance (this can happen for a multitude of reasons). If this is a payment option that relates to your situation, or you would like to receive more information on how we can help design a potential cash pay plan, please feel free to reach out to our team anytime for help. It’s our goal to provide you with the highest quality of treatment at an affordable cost.
If you would like additional information or help regarding financing treatment here at The Shores Treatment and Recovery, or would like to speak with one of our admissions professionals simply call us anytime.