Insurance
What any particular plan provides—as far as benefits, access to care and out-of-pocket expenses—varies depending on the type of plan and how and where you got it. Generally plans fall under one of two categories: fee-for-service or managed care. The following outlines the basics of these plans and what you can expect from them.

— Fee-for-Service Health Plans
Having a fee-for-service plan means you can seek treatment from any doctor or provider as well as any specialists without requiring a referral. Sold by traditional insurance companies, fee-for-service plans sometimes are called to as “indemnity plans.” For medical conditions the policy covers, this type of plan generally pays for most, but not all, of the costs of treatment.

On fee-for-service plans, sometimes the insured must pay the bill at the time of the treatment then file a reimbursement claim accompanied by appropriate receipts and records with the insurance company. Other times, the provider bills the insurance company first for its share of the health costs and charges only the supplementary amount to the insured patient. As required by Colorado law, insurance providers must be prompt in repaying filed claims, but “prompt” can mean several weeks or more depending on the nature of the claim.

If you have a fee-for-service plan, you will pay the following:
  • Premiums are fees paid on a cyclical basis (e.g., semimonthly, monthly, quarterly) that go into the system, and this enables you to receive coverage when you need it. Premiums for plans obtained through an employer likely are deducted automatically from your paycheck. The benefit of insurance through an employer is that many employers contribute a percentage or all of the premium as an employment perk, but law does not require them to do so.
  • Deductibles are the maximum out-of-pocket amount you pay before the insurance provider begins to pay, and your progress toward meeting it resets at the beginning of each plan year (may differ from the calendar year). The deductible varies depending on the plan’s stipulations and often the preference of the insured; however, in general, the deductible functions inversely with premium costs. If you generally are healthy and will not use the insurance often, choose a higher deductible because it means paying a lower premium every cycle. However, if you have a serious illness or chronic medical needs requiring extensive treatment, a lower deductible (with a higher premium) means the insurance will begin to pay sooner. With family plans, although some assign each person a separate deductible, others have one deductible that applies to the entire family.
  • Coinsurance comes into effect after you meet the deductible amount from out-of-pocket expenses. After that point, you pay only a percentage of the remaining costs on covered health services for the plan period while the insurance company pays the rest. The amount of coinsurance in your policy also varies across plans and relates inversely to the amount you pay in premiums. In Colorado, law requires plans to pay at least 50 percent of the coinsurance costs, but some pay as much as 70 or 80 percent of the cost, leaving you to pay only the balance.

Most fee-for-service plans have a “lifetime maximum,” which means they only pay up to a certain amount, such as $1 million, toward your total lifetime medical expenses or for certain medical conditions.

   
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