Deductibles, Networks, Copays, & More
You have health insurance. You went to see your doctor. So why did you still get a bill?
If you’ve ever looked at a medical bill or insurance statement and wondered what a deductible, copay, coinsurance, or “in-network” provider means, you are far from alone.
Health insurance can be confusing—even for people who have had coverage for years. Different plans have different rules and knowing that your insurance “covers” a service does not always mean the service will be free.
At South Tabor Family Physicians, our Business Office spends a lot of time helping patients understand how their insurance works and why they may be responsible for part of the cost of their care. Here are some of the most common terms that can help make sense of it all.
First: What Does It Mean When Insurance “Covers” Something?
This is one of the biggest sources of confusion. When your insurance company says a service is covered, it generally means the service is included as a benefit under your health plan. It does not necessarily mean your insurance company will pay the entire bill.
Depending on your plan, some of the cost may still be your responsibility through a deductible, copay, or coinsurance.
Think of health insurance as an agreement about how health care costs will be divided between you and your insurance company. Exactly how those costs are divided depends on your individual plan.
What Is a Health Insurance Premium?
Your premium is the amount you pay to have health insurance coverage. You may pay it monthly yourself, or part of it may be paid by your employer. Paying your premium keeps your insurance active. It does not mean that all of your medical care is then free.
This is separate from the deductible, copays, and coinsurance you may pay when you actually receive care.
What Is a Deductible?
Your deductible is the amount you may have to pay for covered health care services before your insurance plan begins paying its share for certain services.
For example, imagine your plan has a $2,000 annual deductible. If a covered service costs $200 and that service is subject to your deductible, you may be responsible for the negotiated cost until you have met your deductible.
Once you reach the deductible, that does not necessarily mean everything becomes free. Your plan may then divide costs with you through copays or coinsurance.
There is another important detail: not every service is necessarily subject to the deductible.
Some plans cover certain services before the deductible has been met. Many preventive services are also covered without cost-sharing when requirements are met.
This is why two patients receiving similar care may owe very different amounts.
What Is a Copay?
A copay is usually a fixed dollar amount you pay for a covered health care service.
For example, your plan might require:
- $25 for a primary care visit
- $50 for a specialist visit
- $15 for a certain prescription
Your plan may also have separate cost-sharing for services you receive during your visit, such as lab work or X-rays. These services are often covered through your deductible or coinsurance, but some insurance plans assign a separate copay to them.
For example, you might have a copay for your office visit and then an additional copay for lab work or an X-ray performed during that same visit.
This can be confusing because all of the care may happen at the same appointment, but your insurance plan may process the office visit, lab services, and X-ray services separately.
The amount you owe—and whether a service is subject to a copay, deductible, or coinsurance—depends on your specific insurance plan. These rules are determined by your insurance plan, not your doctor’s office.
What Is Coinsurance?
Coinsurance is different from a copay because it is usually a percentage rather than a fixed dollar amount.
Suppose your plan has 20% coinsurance after your deductible. If the insurance company’s allowed amount for a covered service is $200, your share could be $40 and your insurance company would pay the remaining $160.
Again, the exact calculation depends on your plan.
What Does “In-Network” Mean?
Insurance companies create networks of doctors, clinics, hospitals, pharmacies, laboratories, and other health care providers.
An in-network provider has a contract with your insurance plan. These contracts generally include negotiated rates for services. Because of those agreements, receiving care from an in-network provider usually costs you less than receiving the same care outside the network. But there is an important point here:
Accepting an insurance company is not always the same thing as being in-network with every plan that company offers.
An insurance company may offer many different plans and networks. A medical practice may participate in some but not others. That is why it is important to check your specific plan, not simply the name of the insurance company on your card.
What Does “Out-of-Network” Mean?
An out-of-network provider does not have a contract with your particular health plan. Depending on your insurance, this may mean:
- You pay a larger portion of the bill.
- Your deductible or coinsurance is higher.
- Your insurance pays less.
- The service does not count toward your in-network deductible or out-of-pocket maximum.
- Your plan may not cover the service at all.
Some plans offer out-of-network benefits. Others have very limited or no coverage outside their network except in certain situations.
Before scheduling non-emergency care, contacting your insurance company is one of the best ways to confirm whether a particular provider is in your plan’s network.
What Is an Out-of-Pocket Maximum?
Your out-of-pocket maximum is generally the most you will have to pay during a plan year for covered, in-network services through deductibles, copays, and coinsurance. Once you reach that limit, your plan generally pays 100% of covered in-network benefits for the remainder of the plan year.
Your monthly insurance premiums do not count toward this limit. Out-of-network services, non-covered services, and some other expenses may not count toward it either.
Why Did I Get a Bill If I Have Insurance?
This is the question medical offices hear all the time. There are many possible reasons. You may not have met your deductible yet. You may owe a copay or coinsurance. A particular service may have been applied differently under your plan. A provider or service may have been outside your network. Your plan may require authorization for certain care. Or a service may not be covered under your policy.
Usually, the medical office first sends a claim to your insurance company. The insurance company processes the claim according to your plan and tells the office how much insurance will pay and how much is the patient’s responsibility.
That remaining patient responsibility is what may become your bill. So receiving a bill does not automatically mean that your insurance “didn’t pay.” It may mean your insurance processed the claim and determined that a portion of the cost belongs to you under your plan.
What Is an Explanation of Benefits?
After a claim is processed, your insurance company may send you an Explanation of Benefits, often called an EOB. An EOB is not a bill. It usually shows:
- What the provider charged
- The amount allowed under your insurance plan
- What your insurance company paid
- What was applied to your deductible
- Any copay or coinsurance
- The amount you may owe
Your EOB can be one of the most useful tools for understanding a medical bill. If the amount on a bill surprises you, compare it with your EOB. If something still doesn’t make sense, your insurance company can explain how the claim was processed.
Who Should I Call When I Have a Question?
It depends on the question. Your medical office can help explain the bill it sent you and the services listed on it.
Your insurance company, however, is usually the best source for questions about your specific benefits, including:
- How much of your deductible you have met
- Whether a provider is in-network
- Your copay or coinsurance
- Whether a service requires prior authorization
- Whether a service is covered
- Why your insurance processed a claim a particular way
The customer-service number is usually printed on the back of your insurance card. When calling, have your insurance card available and ask specifically about your plan—not just the insurance company in general.
A Note About Surprise Medical Bills
Federal law provides protections against certain unexpected out-of-network medical bills.
The No Surprises Act protects many people with private health insurance from unexpected out-of-network charges for most emergency services and certain services received from out-of-network providers at in-network facilities.
These rules do not mean that every medical bill is a surprise bill or that patients do not have to pay their normal deductible, copay, or coinsurance. If you receive an unexpected out-of-network bill, however, there are resources available to help you understand your rights.
A Little Knowledge Can Make Health Care Less Confusing
Health insurance shouldn’t feel like another language, but sometimes it does. Understanding a few basic terms—premium, deductible, copay, coinsurance, network, and out-of-pocket maximum—can make it much easier to understand what your plan pays, what you may owe, and what questions to ask before receiving care.
And don’t be embarrassed to ask questions. Insurance plans can be complicated, and the details can change from one plan to another.
Helpful Resources
HealthCare.gov — Health Insurance Glossary
Definitions for deductibles, copays, coinsurance, networks, out-of-pocket costs, and other common insurance terms. https://www.healthcare.gov/glossary/
OregonHealthCare.gov — Understanding Health Coverage Costs
A helpful Oregon resource explaining deductibles, copays, coinsurance, out-of-pocket limits, and why provider networks matter. https://healthcare.oregon.gov/explorehealth/using/Pages/costs.aspx
Centers for Medicare & Medicaid Services — Medical Bill Rights
Information about the No Surprises Act and protections against certain unexpected medical bills.
https://www.cms.gov/initiatives/your-patient-rights/medical-bill-rights
South Tabor Family Physicians has been caring for individuals and families in the Portland community for more than 60 years, offering comprehensive care at every stage of life. We’re conveniently located right off I-205 and are accepting new patients.
Call 503-261-7200 to schedule your next visit or get to know our providers here.
