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December 4, 2023

Understanding Health Insurance Plans and Options 

Understanding Health Insurance Plans and Options 

Health insurance is an important part of managing your healthcare costs and ensuring you have access to quality medical care. It can be a complex and often confusing topic, with a multitude of terms and options to consider. In this article, we will break down some of the most important concepts and choices you'll encounter when dealing with health insurance.

What is the difference between in-network and out-of-network?

An in-network provider is one that has a contract with your insurance company and has agreed to provide services at negotiated rates. In-network services are typically more affordable, with lower out-of-pocket costs. 

Out-of-network providers, on the other hand, do not have a contract with your insurer, and may result in higher costs for you. They are less restricted by the insurance company and may be able to offer better care with less restrictions or pre-authorizations being required.

What is a deductible?

A deductible is the amount you must pay out of your pocket for covered healthcare services before your insurance starts covering costs. For example, if your health insurance plan has a $1,000 deductible, you'll be responsible for paying the first $1,000 in medical expenses in a given year. 

After you've met your deductible, your insurance will typically cover a portion of your medical expenses. When you have a high deductible, your monthly insurance cost is typically lower, but you’ll need to pay more out of pocket upfront before your coverage will kick in. 

When deciding on your health insurance plan, you should consider what you are using your health insurance for. If you are a young, healthy, individual, using health insurance benefits for yearly check-ins, you likely don’t need high monthly payments. However, if you're a family of five and you have a pre-existing condition that you're seeing the doctor regularly for, you may want to pay for a better plan that has higher monthly premiums, but lower deductibles and lower copays.

What is a Co-Pay vs. Co-Insurance?

Co-pay and co-insurance are both ways you share the cost of healthcare services with your insurance company, but they work differently:

A co-pay is a fixed amount you pay for specific healthcare services, like a doctor's visit or prescription drugs. For example, you might pay a $20 co-pay for each doctor's visit. Co-pays make it easier to budget for medical expenses.

Co-insurance is a percentage of the cost of a covered healthcare service that you must pay. If your plan has a 20% co-insurance for hospital stays, and the total cost of your hospital stay is $5,000, you'll be responsible for paying $1,000 (20% of the cost). Co-insurance can result in variable out-of-pocket expenses, depending on the cost of the service.

Out-of-Pocket Max (OOP Max)

The out-of-pocket maximum is the maximum amount you'll have to pay for covered healthcare services in a given year. Once you reach this limit, your insurance should cover all eligible expenses at 100%. The out-of-pocket maximum includes your deductible, co-pays, and co-insurance. Understanding your OOP max is crucial because it sets a cap on your potential expenses, providing financial protection in the event of a major medical issue.

Health Savings Account (HSA) vs. Flexible Spending Account (FSA)

Both HSA and FSA are tax-advantaged accounts that allow you to save money for qualified medical expenses, but they have key differences:

Health Savings Account (HSA): To qualify for an HSA, you must be enrolled in a high-deductible health plan (HDHP). Contributions to an HSA are tax-deductible, and the funds can be invested and grow tax-free. You can use HSA funds for a wide range of medical expenses. They roll over from year to year, and you can take the account with you if you change jobs.

Flexible Spending Account (FSA): With the FSA you can contribute pre-tax dollars to your FSA and use the funds for qualified healthcare expenses. However, any money left unspent at the end of the year may be forfeited. FSAs are not tied to specific insurance plans, they are offered through your employer. 

Higher Premium vs. Higher Deductible

When selecting a health insurance plan, you often have to make a trade-off between premiums and deductibles:

Higher Premium Plans are plans with higher premiums but lower deductibles and lower out-of-pocket costs. They are a good choice if you expect to use healthcare services frequently and want predictable expenses.

Higher Deductible Plans are plans with higher deductibles but have lower premiums. They are ideal if you're generally healthy and don't expect to incur many medical expenses. These plans work well with HSAs, allowing you to save on premiums while setting aside tax-advantaged funds for future medical needs.

Understanding health insurance terms and options allows you to make informed decisions about your healthcare coverage. You should carefully consider your medical needs, budget, and risk tolerance to choose a plan that suits your specific circumstances.

It is currently open enrollment from November 1st until January 31st. During this time you can purchase health insurance for the upcoming year. If you have any questions on choosing your health insurance plan to use specifically at Team Elite Chiropractic you can email us at

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