Health insurance has changed a lot over the past decade and continues to evolve as both employers and insurers look to drive down costs. Before you choose your coverage for next year, review these terms to ensure that you understand them and make the best possible choice for your family’s healthcare needs.

Cost Sharing

The days of health insurance plans providing 100 percent coverage are long behind us. Coverage today typically means that the person with the health insurance plan pays some of the cost and the insurer pays some of the cost. The most common forms of cost sharing include copays, deductibles and coinsurance. A copay is a usually a nominal amount that you pay at the time of service. A deductible is the amount you must pay before your plan starts paying anything. Coinsurance is the percentage of the medical bill that you pay after you have satisfied your deductible.

Health Insurance Premiums

If you receive your health insurance through your employer, the premium is the amount deducted from each paycheck to help pay your coverage cost. However, this figure does not represent the full amount. Your employer also contributes to this cost as part of your employee benefits. Typically, this is at least half of the premium. People who buy health insurance through an open marketplace pay the entire premium themselves by mailing a check each month or paying electronically online.

Out-of-Pocket Maximum

Even though it may feel like you are paying a lot for your coverage, every plan has a limit on how much you must pay. This is called the out-of-pocket maximum. It includes how much you paid towards copays, deductibles and coinsurance to reach the cap for your plan. Most health insurance plans have an individual maximum as well as a family maximum.

Provider Network

Health insurance companies work out deals with healthcare providers for discount rates. These providers are part of the insurance company’s network. You will pay less for your healthcare services when you choose a provider who is in-network with your insurance carrier than you would if you sought services from a provider who did not participate in the network. The difference in price can often be significant.

Prior Authorization

One way to control healthcare costs is to require members to receive prior authorization from the plan before obtaining drugs or services that cost a considerable amount. If your doctor recommends a service that you are not sure is covered, be sure to call your insurance provider to determine if you need prior authorization.

We are Here to Help

At Arena District Pharmacy, we want to see you get the healthcare you need. We will work with your provider to obtain authorization when needed and provide the lowest cost drug when available. Please contact us with any additional questions.