Insurance 101

Premium is the amount paid each month in order to have insurance. If your insurance is provided through an employer they may pay a portion of this for you and/or your portion may be deducted from your paycheck.

Deductible is the amount of money that you pay out of pocket towards healthcare services before insurance benefits begin. These services get billed to insurance, the amount is adjusted to the “allowable rate,” and you pay your provider this amount. Some insurance plans with a deductible have certain insurance benefits that are “before deductible” where you are only responsible for the co-pay/co-insurance.

Co-pay is a set portion of a service that you are responsible to pay each time that service is billed; insurance covers the rest. If you have a co-pay for mental health services, this is the amount you will owe each time you see your provider at OSH. If you have a deductible, this is the amount the client will owe after the deductible is met.

Co-insurance is similar to a co-pay but it is a percentage of the service’s allowable rate, not a set amount. This means the amount owed each session is specific to your insurance plan’s allowable rate and the service code that was billed and can change a little over time. Sometimes plans have both a co-pay and co-insurance; if a service’s allowable rate is $100 dollars and a client’s co-pay is $25 and their co-insurance is 10% the client would pay $25, and then 10% of $75 ($100-$25) which is $7.50 for a total of $32.50.

Allowable Rate is one of the really complicated things about insurance, but is crucial to understanding what you may owe for a service. When OSH contracts with an insurance company to be an “in-network” provider, we make a “deal” with them and accept a lower payment per session in exchange for being able to see clients who have their insurance. That agreed upon limit/discounted rate for services/the set rate in the contract, is the allowable rate. So, when we bill insurance $175 (because we have to bill everyone the same) they say “Nope! We agreed to $101.83” (Yes, this is a real allowable rate from BCN) As the allowable rate, the $101.83 is the number used for deductibles, co-pays, and co-insurance. This rate is different for each insurer, plan, and provider license and the rates can change periodically (#insuranceiscomplicated). So, though we have a general idea of what the rates are, we cannot know exactly what your allowable rate is until your claim is processed 2-6 weeks after your session.

Out of Pocket Max (OOP-Max) is the amount of money that someone pays out of pocket for healthcare services before their insurance plan covers 100% of their expenses. This number is often very high and some plans have an individual and a family amount. This number is important because if all of your billed healthcare services hit the Out-of-Pocket Max, then you no longer owe your co-pay/co-insurance.

In-Network and Out-of-Network are terms used to describe if a healthcare facility/provider is contracted with an insurance panel and specify what benefits your coverage offers for each situation. In-network is when your provider is contracted with an insurance company and you can use your benefits accessing services with them. Out-of-Network is when you are seeing a provider who does not take your insurance. If your insurance plan has out-of-network benefits, you may be able to pay your provider up front and then get paperwork to give to your insurance company to get partially reimbursed for those services.

HMO vs. PPO: An HMO insurance plan (e.g., BCN) is a plan that only covers services provided by in-network clinicians/practices. A PPO insurance plan (e.g., BCBS) often has benefits for in-network and out-of-network clinicians/practices.