July 05, 2015
I Don't Know What A Deductible Is
So far, I’ve had to select a health insurance plan 3-4 times in my life. Until now, I’ve basically selected randomly, because:
- I had no idea what I needed.
- I didn’t understand any of the terminology.
In the last year, after paying random bills that keep showing up in my mailbox, I’ve decided to get as minimally educated as possible to not feel angry when the next bill comes. Here’s a summary:
- Co-payment (copay): A fee you pay when you go the doctor, just because.
- Deductible: The amount that is deducted from the amount the insurance company pays
- This is confusing for me. Why are costs framed in the context of the insurance company. If it’s a deductible for me, it should be deducted from what I pay. But no, it’s backwards.
- Premium: What you pay the insurance provider on a regular basis for their services
Flow of Transactions
- Go to doctor
- Get service
- Show them your insurance card
- Pay copay
- Doctor sends bill to insurance company
- Insurance company calculates how much they will pay
- This is some combination of deducting the “deductible” and taking some percentage based on the type of treatment and your plan. It’s not clear to me which order these steps happen in.
- Insurance company pays doctor
- Doctor sends me a bill for remaining cost of service
I was really confused a few times when I received bills in the mail for services I thought I had already paid for. In reality I had only “paid for” the copay.
Why didn’t I learn some version of this in high school? Going through it a few times is probably necessary to grasp how it all works. Or maybe I’m the only one who didn’t really care to spend the time understanding it. Either way, I wasn’t really taught any of this and reading about it or researching it offhand is really boring (and I’m lazy).
Ok, that’s all for now. Maybe if I get a new job and have to fill out another one of those stupid W2s (edit: W4s) again, I’ll be forced to write a dumbed-down primer on that too for myself.