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The vast majority of health insurance policies in the United States today are of the managed care variety. These products work on a network platform consisting of pre-defined groups of physicians and facilities through which medical treatment is provided. Doctors sign up to participate with insurance companies and become part of these networks, and prices paid for their services are negotiated and agreed upon in advance. Consumers insured by managed care plans, like HMOs and PPOs, receive treatment from in-network providers at a lower cost than those same services from nonparticipating providers. Some policies, like HMOs, restrict payment of claims to only those from participating doctors, thereby limiting consumers from seeking treatment outside the network. Other policy types, like PPOs, still pay claims from nonparticipating doctors, but at a much lower rate than for in-network services.
Many policies contain deductibles, which serve to reduce the consumer’s monthly cost by increasing the out-of-pocket expenses if treatment is ever actually required. Deductibles must be paid in full before the insurance carrier begins to pay for any portion of treatment costs. Common deductibles range from $1,000 to $5,000 and continue to increase as the fight over affordability of health care in the country rages on.
A copay is a nominal fee insured members pay for each visit to a physician. The remainder of the office visit cost becomes the responsibility of the insurance carrier. Common copays range from $10 to $50, but
continue to steadily increase. It is not uncommon today to see office visit copays as high as $150.
The presence of coinsurance as a component to health insurance plans continues to increase every year. Coinsurance serves as a method of further reducing the monthly premium for a medical policy by increasing the out-of-pocket expenses for covered members. After the member’s deductible is fulfilled, if one exists, the remaining treatment costs are split between the patient and the insurance carrier. Costs get divided by percentages, not exact dollar amounts. Coinsurance percentage splits range from 50/50 to 90/10, with the member becoming responsible for the smaller figure.
Considering the potentially exorbitant cost of major medical services, a single procedure could leave the average American with medical bills far beyond her capabilities to ever pay. For example, the coinsurance concept, working on a shared percentage basis, could result in insured patients leaving the hospital with tens of thousands of dollars in treatment costs. To prevent financial devastation to insured consumers, health insurance policies contain maximum out-of-pocket, or MOOP, figures that represent the absolute most the members can be required to pay for their medical treatment during the course of a given policy year. MOOP figures typically range from $2,500 to $10,000, but are often seen as high as $15,000. If, during the course of the policy year, the member’s out-of-pocket expenses equal or exceed the MOOP figure, all subsequent medical bills become entirely the responsibility of the insurance company.