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Health care in the United States can be expensive. A single doctor's office visit can cost several hundred dollars, and an average three-day hospital stay can run into the tens of thousands of dollars (or even more) depending on the type of care provided. Most of us cannot afford to pay such large sums if we get sick, especially since we don't know when we might get sick or hurt or how much care we might need. Health insurance provides a way to reduce these costs to more affordable amounts.

The way it normally works is for the consumer (you) to pay a premium up front to the health insurance company and that payment allows you to share the "risk" with many other (registrants) making similar payments. Since most people are in good health most of the time, premiums paid to the insurance company can be used to cover the expenses of the (relatively) small number of enrollees who become ill or injured. Insurance companies, as you can imagine, have studied the risks in depth and their goal is to charge a premium sufficient to cover enrollee's medical costs. There are many different types of health insurance plans in the United States and many different rules and arrangements regarding care.

Here are three important questions to ask yourself when deciding which health insurance will work best for you:

Where can I get care?

One of the ways that health insurance plans control their costs is by affecting access to service providers. Service providers include doctors, hospitals, laboratories, pharmacies, and other entities. Many insurance companies contract with a specific network of service providers who have agreed to serve plan registrants at more favorable rates.

If the provider is not in the network plan, the insurance company may not pay for the services provided or may pay a smaller portion of what it would pay for in-network care. This means that an associate who goes out of the network to seek sponsorship may have to pay a much higher share than the cost. This is an important concept to understand, especially if you are not originally from the local Stanford area.

If you have a plan through a parent, for example, and that plan's network is in your city, you may not be able to get the care you need in the Stanford area or you may incur much higher costs to get that. Attention.

What does the plan cover?

One of the things America's health care reform has done (under the Affordable Care Act) is introduce greater standardization of insurance plan benefits. Before this standardization, the benefits offered varied greatly from plan to plan. For example, some plans covered prescriptions, others did not. Now, plans in the United States must offer a number of "essential health benefits" including

  • Emergency services
  • Hospital treatment
  • Lab tests
  • Maternity and newborn care
  • Treat mental health and substance abuse
  • Outpatient care (doctors and other services you get outside of the hospital)
  • Pediatric services, including dental and vision care
  • Prescribed medication
  • Preventive services (like some vaccines) and chronic disease management
  • Rehabilitation services

For our international students who may be considering coverage with a plan outside of the US, ask yourself the question "What does the plan cover?" It's crucial.

How much?

Understanding the costs of insurance coverage is extremely complex. In our overview, we talked about paying a premium to join a plan. This is a transparent upfront cost to you (meaning you know how much you are paying).

Unfortunately, for most plans, this is not the only cost associated with the care you receive. There is usually a cost to accessing care. This cost is recorded as deductibles, coinsurance, and / or participation (see definitions below) and is the share you pay out of pocket when you receive care. As a general rule of thumb, the more you pay up front, the less you pay when accessing care. The less premium you pay in premium, the more you pay when you receive care.

The question for our students is, pay (higher participation) now or pay (higher participation) later?

Either way, you will pay for the care you receive. We have taken the approach that it is best to pay a larger portion of a premium up front to minimize the costs incurred in providing the service as much as possible. The reason for our thinking is that we do not want any obstacle to attention, such as high turnout in service time, to deter students from seeking attention. We want students to have access to medical care when needed.

Important insurance terms and concepts:

  • Out-of-pocket costs - The terms "out-of-pocket" and / or "cost-sharing" refer to the portion of medical expenses that you are responsible for paying when you actually receive medical care. The monthly premium you pay for care is independent of these costs.
  • Annual Deductible: The annual deductible is the amount you pay for each plan year before the insurance company begins to pay its share of the costs. If the deductible is $ 2,000, you are responsible for paying the first $ 2,000 in medical care you receive each year, after which the insurance company will begin to pay its share.
  • Copayment (or “Copayment”) - Your copayment is a fixed, up-front amount that you pay each time you receive care when that care is a copayment. For example, a $ 30 copayment may apply for a doctor visit, after which the insurance company pays the rest. Plans with higher premiums generally have fewer contributions and vice versa. Plans without joint contributions often use other cost-sharing methods.
  • Coinsurance - Coinsurance is a percentage of the cost of your health care. For an MRI that costs $ 1,000, you could pay 20 percent ($ 200). Your insurance company will pay the remaining 80 percent ($ 800). Plans with higher premiums tend to have lower coinsurance.
  • Annual out-of-pocket maximum: The annual out-of-pocket limit is the largest cost sharing you will be responsible for in a year. It is the total withholding, participation, and coinsurance (but not including your premiums). Once you reach that limit, your insurance company will bill for 100 percent of covered costs for the remainder of the plan year. Most members never reach the maximum limit, but this can happen if very expensive treatment is required for an accident or serious illness. Plans with higher premiums generally have fewer out-of-pocket limits.
  • What it means to be a "covered benefit":

The terms 'covered benefits' and 'covered' are used regularly in the insurance industry, but they can be confusing. The term "covered benefit" generally refers to a health service that is included (ie, "covered") within the premiums for a particular health insurance policy that is paid for or on behalf of a registered patient. The word "covered" means that the insurance company will pay a portion of the allowed cost for health services. This does not mean that the service will be paid 100%.

For example, in a plan where Urgent Care is "covered," a copayment may apply. Post to pocket patient's account. If the copay is $ 100, the patient must pay that amount (usually at the time of service), then the insurance plan "covers" the remainder of the allowed cost for urgent care service.

In some cases, the insurance company may not pay anything for "covered benefits." For example, if a patient has not yet met an annual deduction of $ 1,000 and the cost of a covered health service provided is $ 400, the patient will have to pay $ 400 (often at the time of service). What makes this service "covered" is that the cost is calculated in the annual deductible, so there is only $ 600 left for the patient to pay for future services before the insurance company begins to pay their share.