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Single Mom's Guide to Health Insurance

Tip 4, Single Mom’s Guide to Health Insurance

Single Mom's Guide to Health Insurance

Know your max liability

 

So many times, people get hung up on getting a lower deductible and having copays for something to be considered a “good” plan. However, most Americans miss the absolute most important thing in their health insurance documents: The Out-of-Pocket Maximum.

This is the most you would pay in one calendar year if everything went horribly wrong. If
you have health insurance, this is the maximum of liability and it’s a number you need to be
aware of!

For example:

I often have clients tell me they want the “best” plan and are willing to pay for it! They want a
$250 deductible. In my state, the $250 deductible plan has a $7,900 out-of-pocket maximum
and is often 30% higher than an HSA plan for monthly premiums.
However, if they enroll in an HSA they can often get a lower out of pocket maximum. My plan
is a $4,500 deductible, but that is also the out-of-pocket maximum. At 30% less expensive
per month, it’s an absolute bargain! But most people ignore this plan because all the see is
the deductible.

Let’s look at an example:

Johnny needs a $60,000 heart surgery.

Plan 1: He’s paying $500 a month to get the lower deductible. That equates to $6,000 a year
in insurance premiums. When he has his surgery, he will pay $7,900. So, in total he spent
$13,900. Which beats the pants off $60,000 any day! But it’s not the best he could have done.

Plan 2: He is now enrolled in the HSA plan. He is paying $350 a month. That equates to
$4,200 a year in insurance premiums. BUT when he has his surgery, he pays $4,500. That
means he spent $8,700 less than on the “best” plan. But wait! He also got to put that $4,500
through an HSA account and gained the additional tax savings.

 

Read more here: The Single Mom’s Guide To Health Insurance

 

Common Health Insurance Terms

Common Health Insurance Terms

Common Health Insurance Terms

We understand that navigating the insurance maze can be daunting. Insurance companies use terms like, “Copay” and “Out of Pocket” and sometimes their terms can seem like a foreign language. Here are some of the most common terms you may hear and what they mean.

 

Insurance Premium– This is the cost of your plan, the monthly bill you, or your employer, pays for insurance coverage.

 

Deductible-This is the amount you pay BEFORE your insurance plan kicks and pays for certain services.

 

Copay– This is the upfront fee you pay to your doctor for services and office visits. This also applies to some medications.

 

Coinsurance– This is the amount you pay for services after your deductible has been met.

 

Total Member Responsibility-The amount that you owe for services AFTER your insurance plan has paid their portion. This can include deductibles, copays and coinsurance.

 

Out of Pocket Maximum– This the MOST you will be required to pay towards your deductible, copays and coinsurance. When you meet the Out of Pocket Maximum, all eligible charges for medical services are covered at 100% for the rest of the year.

 

Have questions? Give us a call!