Understanding California Health Plans
This may be the best explanation you ever get in order to understand the many options available to you for California health insurance. This is just a simplified view of the plans so make sure to look at the details of any prospective plan. At the end of the article, we will discuss the various plans that differ from this simplification but this break-down will help with 80% of the plans on the market. Now...
California health insurance plans break down into three main categories.
1. Office consultation. With most health insurance plans, you will have a copay or co-insurance to pay for office consultations. The copay or co-insurance are typically not subject to the main deductible of the plan. A copay is a fixed amount such as $30 for an office visit. Co-insurance is a fixed percentage such as 30% for an office visit. An example of co-insurance would be:
Office
Visit:
$100
charge
Negotiated
rate:
$
60
charge
Co-insurance:
30%
In this
case,
the
subscriber
would
pay 30%
of the
negotiated
rate of
$60 for
a total
of $18.
The
negotiated
rate is
the
charge
that an
in-network
doctor
or
provider
has
agreed
to in
order to
participate
in that
network.
This
usually
applies
to
PPO
type
plans.
The
office
copay or
co-insurance
is only
for the
consultation
itself.
If the
doctor
runs
labs,
performs
procedures,
or does
other
services
in
addition
to the
consultation,
these
charges
are
handled
in the
third
section
and will
be in
addition
to the
copay or
co-insurance.
The
office
consultation
is one
of the
key
items
when
looking
at your
California
health
insurance
quote
for
Individual
Family
or
Small
Group
insurance.
You will
typically
see
"$25" or
"30%" in
the
results.
A quick note. With HSA qualified high deductible plans, the office visit consultation is subject to the main deductible. This means you must meet the deductible before you get a copay or co-insurance benefit. You will get negotiated rates for seeing an in-network provider even if the benefit is subject to the deductible. For example, in the case above, you would pay the $60 as part of your deductible. Some plans do not cover office visits at all. They tend to be the least expensive hospital or catastrophic coverage plans.
2.
Prescription
coverage
and
California
health
insurance.
With
most
plans,
prescription
coverage
is
broken
out
separately
from the
main
deductible
in the
form of
copays.
Almost
all
plans on
the
market
today
distinguish
between
Generic
and
Brand
name.
Insurance
companies
have a
Formulary,
or list
of drugs
they
deem to
be
effective
and
cost-effective.
The lower-priced drugs are Generic and typically you have a smaller copay (around $10 on average) which is not subject to any deductible.
Brand formulary drugs are more expensive and tend to be the patented drugs that are heavily advertised and marketed. Essentially, they are newer drugs. Usually, these drugs are handled with a higher copay (average around $30) after a separate brand name deductible is met. This deductible tends to run $250-750 annually (per member) for individual family California health insurance and $150-250 for California Small Group health coverage. The deductible is usually per person (in a family policy) and it resets January 1st regardless of when the plan starts. One you pay the brand drug cost up to the deductible amount, following brand formulary drugs will just require a copay ($30 for example).
There is sometimes a 3rd category call Brand Non-Formulary. This essentially means the drug is very expensive and there are less expensive alternatives. With most plans, you will have to pay a percentage of the cost so there can be quite a bit more out-of-pocket with Brand Non-Formulary.
You can reduce your cost by asking your doctor if there a Generic equivalent. Some plans do not cover Brand drugs at all so double check this as the trend towards very expensive medications (10's of thousands of dollars) for more exotic conditions.
3. Pretty much everything else. Most other coverage benefits (labs, x-rays, emergency, surgery, hospital) are typically subject to the main deductible. This is another item listed when you request your California health quote. The average deductible amounts run from no deductible up to $5000 on average. The deductible is typically per person (usually up to two people a family) and it resets January 1st as well. When you see "2 member max", this means that if two people meet their deductible in a calendar year, the other family members do not need to.
One note...HSA Health Savings Account plan deductibles are cumulative. This means that the family deductible (for two or more people on one policy) is not met for any individual on the policy until the family deductible is met. For example, if the individual deductible is $2400 and the family deductible is $4800, one individual on the family plan would not meet the deductible till the $4800 was met. Other family members would have their deductible satisfied as well. Essentially, all individuals on the family plan are working towards one $4800 deductible.
Once you meet the deductible you either go into a co-insurance sharing percentage or the carrier takes over 100%. For example, if your deductible $2500, and the co-insurance percentage is 30%, with a max out of pocket of $7500. Let's say you have an $80,000 hospital charge (in-network for covered benefits). You would pay the first $2500, then you would pay 30% until you hit another $5000 out of pocket. Essentially, you will pay $7500 (max out of pocket) and the carrier will pay the $72,500. With some plans, the max out of pocket is in addition to the deductible. The Deductible and Out of Pocket Max are two other important items listed when you get your health insurance quote.
With the Office Visit, Prescription Coverage, Main deductible and Max out of Pocket, you now can read the health quote results with confidence.
Individual
and
Family
California
health
insurance
instant
quote
Small
Group
California
health
insurance
instant
quote
Medicare
Supplement
instant
quote
