When it comes to health plans, the language of coverage can sometimes be difficult to understand. It’s important to know how it works to better understand your health plan benefits. Here are some common terms you’ll need to know:
- Premium
- Deductible
- Copayment (or copay)
- Coinsurance
- Maximum Out-of-Pocket (MOOP) Amount
What is a Premium?
A Premium is the fixed monthly amount that you pay for medical and/or prescription drug insurance coverage. You must pay your Premium to your health plan each month (unless Medicaid or another program pays it for you).
What is a Deductible?
Deductible is the amount you must pay for medical services or prescription drugs before your plan begins to pay its share. You must pay the full cost of your covered services or prescription drugs, until you have paid the deductible amount.
Example: If your Part B Deductible is $283, you pay $283 for your covered services before your Plan begins to pay.
After meeting your Deductible, you and your plan share the costs for covered services. Generally, the plan will state the cost of your share in either a copayment or coinsurance amount (never both).
What is Cost Sharing?
Cost sharing means the portion of costs you pay when you get health care or fill a prescription. Types of cost-sharing include copayments and coinsurance. You share the cost of your health care with your health plan.
What is Copayment (or copay)?
A copayment is a fixed dollar amount that you must pay for a service or drug.
Example: A Specialist visit costs $100. Your copayment is $20 for Specialist visits. So, you pay $20, and your plan pays the remainder of $80.
What is Coinsurance?
Coinsurance is a percentage of the total cost that you must pay for a service or drug.
Example: A Specialist visit costs $100. Your coinsurance is 20% for Specialist visits. So, you pay 20% of $100 = $20, and your plan pays the remainder 80% of $100 = $80.
What is the Maximum Out-of-Pocket Amount?
Each year, there’s a limit to how much you’ll pay for covered medical services. It is called the Maximum Out-of-Pocket Amount (MOOP) — Once you reach your MOOP, your plan pays the full cost of your covered medical services for the rest of the year. Your MOOP is listed in your member materials such as your Evidence of Coverage or Annual Notice of Change. MOOP applies to medical services only; it does not apply to prescription drug coverage.
Example: If your MOOP is $5,000 and you’ve paid that amount before the end of the year, you pay $0 for covered services through December 31st.
Learn More About Drug Coverage
For a detailed explanation of Elderplan’s Part D Prescription Coverage and cost sharing, visit:
elderplan.org/member-benefits/elderplan-benefits/prescription-drugs
Other Factors That Affect What You Pay:
- Benefits: Each benefit has a defined cost, but depending on how the benefit is utilized, cost sharing will vary. Pay attention to phrases like $20 copay for an office visit, or $10 copay for a telehealth visit.
- Type of Service: Each service has a defined cost, but depending on how the service is delivered, cost sharing will vary. You may have to account for time (like the number of days). Pay attention to phrases like $250 copay for Days 1 through 5, and $0 for Days 6 and beyond.
- In-Network: You may see in-network providers or facilities for covered services.
- Out-of-Network: Services may not be covered if you see providers that are not in your plan’s network.
- Point-of-Service (POS) plan: If you have a POS plan, your plan will allow you to see an in-network OR out-of-network provider for certain covered service.
It’s important to carefully review your plan’s Evidence of Coverage, to explain your health care coverage and costs. If you have questions about your coverage, please call Elderplan Member Services at 1-800-353-3765.
