Protection from high medical costs
Health insurance provides important financial protection in case you have a serious accident or sickness. People without health coverage are exposed to these costs. This can sometimes lead people without coverage into deep debt or even into bankruptcy.
It’s easy to underestimate how much medical care can cost:
- Fixing a broken leg can cost up to $7,500
- The average cost of a 3-day hospital stay is around $30,000
- Comprehensive cancer care can cost hundreds of thousands of dollars
Having health coverage can help protect you from high, unexpected costs like these.
When you have coverage, your plan protects you from high medical expenses 2 ways:
- Reduced costs after you meet your deductible Once your spending for covered services reaches your plan’s deductible, the plan covers part of your medical expenses.
- Example: If your plan has a $1,000 deductible, you pay the first $1,000 in covered services. After that, your plan pays between 60% and 90% of your covered expenses, depending of what kind of plan you have. You pay between 10% and 40% of the costs as coinsurance or copayments.
- Out-of-pocket maximum This is the total amount you’ll have to pay no matter how much covered care you get in a plan year.
- Example: If your plan has a $3,000 out-of-pocket maximum, once you pay $3,000 in deductibles, coinsurance, and copayments the plan pays for any covered care for the rest of the year. This provides important peace of mind and protection from very high medical costs.
Pay less even before you meet your deductible
Even before you meet your deductible, you may save hundreds of dollars in medical costs.
This is true if your plan is a PPO, an HMO, an EPO, or another kind of plan with a network of care providers.
How you save money before you meet your deductible
Insurance companies negotiate discounts with health care providers, and as a plan member you’ll pay that discounted rate. People without insurance pay, on average, twice as much for care. This means when you use a network provider you pay less for the same services than someone who doesn’t have coverage – even before you meet your deductible.
- Sometimes these savings are small. If you’re insured and use a network provider, you may pay $25 for a flu shot instead of the $40 someone without coverage pays.
- In other cases the savings can be big. If use a network provider, you may pay $85 for an office visit instead of the $150 someone without coverage pays. Savings can be even higher for more expensive services.
So even if you don’t reach your deductible during the year, you can save a lot of money on your covered medical services just by being enrolled in an insurance plan.
Originally posted on HealthCare.gov
