A high fever and earache over the weekend could leave you with a large bill from an urgent care facility, while picking up a generic prescription medication could just cost a few dollars instead. Large or small, these types of health care payments are considered out-of-pocket expenses.
What are out-of-pocket expenses in a health plan, and how can you reduce these costs? The more you understand what they are and how they work, the more you can save.
The terms used to describe a health plan can seem confusing at first. Here’s a breakdown of common types of out-of-pocket expenses.
Co-pay: A flat amount you pay for a health care service or prescription medication. Some plans use co-pays, while others do not.
Co-insurance: The amount your plan pays for eligible services after you meet your deductible. For example, a plan may have 80%/20% co-insurance. This means that after your deductible is met, the plan will pay 80% and you’ll pay 20% of future costs.
Deductible: The amount you pay out-of-pocket before your plan’s co-insurance kicks in. The lower the deductible, the more the health plan typically costs.
Maximum out-of-pocket (MOOP): The most you’ll pay each year for eligible in-network health care services before your health plan begins to pay at 100%.
Cost of coverage: To determine a plan’s annual cost, multiply the monthly rate by 12. This is the cost of having the plan, not using it.
Prescription medications: Depending on the health plan, prescriptions may have a flat co-pay amount or be subject to the plan deductible and co-insurance.
You can save money by knowing where to seek care depending on your health needs and anticipating the costs associated with each option.
When You’re Well
Most major health plans offer preventive care at no additional cost. Take advantage of screenings and checkups to help detect issues early. Being proactive could help you avoid expensive treatment for more severe conditions that result when an issue isn’t detected early.
Become familiar with the difference between preventive and diagnostic care. When you schedule an appointment, let your health care provider know which preventive services are covered by your health plan. Then, verify that the services are accurately submitted on your explanation of benefits (EOB) statement so there’s no out-of-pocket cost.
When You Have Mild or Moderate Symptoms
Telemedicine can be an affordable option when you need minor care for issues like congestion, sore throat or ear pain. You can also use it for a follow-up visit after a procedure or to request a medication refill. Visits are sometimes free (as part of some health plans) or are typically offered at lower costs than in-office visits.
It can also be a money-saving option when you’re sick after hours when your regular health care provider’s office is closed. This can be more affordable than getting treatment in an urgent care facility or emergency room.
When You Must Be Seen In-person
Sometimes, you must be seen in person for sensitive appointments that are better face-to-face, imaging, bloodwork and other medical tests that can’t be performed virtually. Use in-network providers and facilities because they will have negotiated rates within your health plan to help reduce costs.
When You Have an Urgent Need
Immediate care is needed in urgent or emergency situations. If you are facing a life-threatening situation, persistent chest pain or loss of consciousness, go to a hospital-based emergency room. Visit an urgent care facility for conditions such as sports injuries or cuts that require stitches.
Freestanding emergency rooms are another type of emergency care facility. These can cost thousands more than urgent care facilities, so it’s important to know where you’re being treated ahead of time. Freestanding emergency rooms include the word “emergency” in the facility name, are not attached to a hospital and offer more complex treatment options than urgent care.
Learn more about the differences between urgent care facilities, hospital-based emergency rooms and freestanding emergency rooms, as well as how to choose where to go for care.
When You Need Prescription Medications
Ask your health care provider for a generic alternative, which typically costs less than a brand-name drug yet is just as effective. Also, consider switching to a 90-day mail-order prescription for maintenance medications. You may also save by comparing prices at major retailers and pharmacies to get the best price. Find more ways to save on prescription medications.
When You’re Eligible for Tax Advantages
Health savings accounts and reimbursement arrangements offer money-saving benefits and tax advantages to help offset out-of-pocket health care costs. Explore the tax advantages and eligibility requirements for Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs).
Whether you’re making sense of health care terms or evaluating health plan options, GuideStone® is here to help in every season of ministry. For more information, contact us at Insurance@GuideStone.org or 1-844-INS-GUIDE (1-844-467-4843), Monday through Friday, from 7 a.m. to 6 p.m. CT.
GuideStone welcomes the opportunity to share this general information. However, this article is not intended to be relied upon as legal advice, tax advice, or medical advice, diagnosis or treatment.
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