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Understanding out-of-pocket expenses

Many may assume that those in Salem who struggle to pay their medical bills only have such a problem because they do not have health insurance. However, statistics show that health insurance does not guarantee that one will avoid the struggles that come with medical debt. Information shared by NerdWallet.com shows that 10 million Americans who have insurance still have difficulties affording their medical expenses.

Perhaps one of the reasons why many may be shocked to learn of the struggles that the insured have in paying their medical bills is due to a misunderstanding over out-of-pocket costs. HealthCare.gov defines these expenses to be any healthcare-related costs not covered by insurance. Included in these are:

  •          Deductibles
  •          Coinsurance
  •          Copayments
  •          Non-covered services

Deductibles are the amount one must meet before his or her insurance will begin to pay for services. Some providers offer high-deductible plans that require low monthly premiums. While these may work well for those who do not routinely visit the doctor, unexpected medical emergencies can leave high-deductible plan holders facing heavy initial costs.

Copayments are set fees paid for each medical visit or prescription refill. These payments do not count towards an annual deductible. Coinsurance is the portion of the claim one agrees to pay. For example, one may have “80-20” coverage, where he or she is responsible for 20 percent of visit bill while his or her insurer covers the other 80.

Most plans set an out-of-pocket maximum per year. Once that is reached, the insurer will pay 100 percent of all covered services. The expenses that are not covered, however, will typically fall back on the policy holder. Insurers typically classify procedures as “non-covered” if they are experimental or if they are not deemed to be necessary according to a patient’s diagnosed medical status. 

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