Health insurance pays for services only when the policy covers them. The plan's allowed amount is the amount it recognizes for a covered service. The contract then tells how much the member pays through a deductible, copayment, or coinsurance. This unit also explains exclusions, benefit limits, and renewal rights.
Learning path
- Health Insurance Cost Sharing: Premiums, deductibles, copayments, coinsurance, allowed charges, and how the order of plan rules affects the member’s share.
- Health Exclusions, Limits, and Renewability: Exclusions, benefit maximums and limits, comprehensive versus limited-benefit coverage, and cancelable, guaranteed-renewable, and noncancelable terms.
How Do You Estimate the Member's Cost?
A member receives an out-of-network service and asks how much the plan will pay.
- Identify whether the service is covered, the allowed amount, deductible status, any applicable copayment or coinsurance, and any benefit limit before estimating the member's cost.
- Check balance billing, a provider charge for the difference between its bill and the plan's allowed amount, when applicable rules permit it.
Study checkpoint
- Can you distinguish premium from cost sharing?
- Can you tell a deductible from a copayment and coinsurance?
- Can you distinguish a coverage exclusion from a dollar or time limit?