Healthcare is a monumental expense for Americans of all ages. But the more you know about your health insurance benefits, the better equipped you'll be to manage the costs associated with your medical care.
Unfortunately, a new HSA Bank report reveals that Americans seriously lack knowledge on the health benefits front. Here's what those gaps currently look like.
1. Copays
Only 51% of Americans know what copay they're liable for under their insurance plan. Your copay is the amount you fork over every time you see a doctor or fill a prescription. Generally, you'll have one copay for your primary care physician and a separate copay for specialist appointments. The copays you're charged for medications will depend on the specific drugs you need. And don't forget that you'll generally have an ER or hospital copay, too.
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2. Deductibles
Your deductible is the amount of money you'll have to shell out each year before your health insurance company starts paying for the services you need. Only 47% of Americans know what their deductible entails, and that's problematic. If you have a high deductible, you may be eligible to participate in a health savings account (HSA), so it's important to get know that information. For the current year, your plan may be HSA-eligible if it comes with an individual deductible of $1,400 or more, or a family level deductible of $2,800 or more.
3. Monthly premiums
Think of your premiums as the fee you pay to have health insurance. Just 45% of Americans know what their monthly premiums look like, which is troubling, because those should be part of workers' budgets. If you get health insurance through your employer, there's a good chance your premiums are subsidized to some degree, which means you don't pay the whole thing -- your company pays part of your premium and you pay the rest, usually via a payroll deduction. But it's still important to know what your premiums cost. If you lose your job and need to get health coverage through COBRA for a period of time, you'll be responsible for paying those premiums in full, so it will help to know what to expect.
4. Out-of-pocket maximums
Your out-of-pocket maximum caps your healthcare spending for the year for covered services. Once you hit that max, your health insurer will pay 100% of the cost of covered benefits you utilize. You'll need to know your out-of-pocket maximum to not only budget for healthcare spending appropriately, but also, to see if your plan qualifies for an HSA. Yet only 38% of Americans know their out-of-pocket maximum. You'll need an out-of-pocket maximum of $6,900 at the individual level, or $13,800 at the family level, to be eligible to fund an HSA.
5. Coinsurance
Coinsurance is the percentage of your healthcare services that you pay once your deductible for the year has been met. For example, if your plan comes with 20% coinsurance for a doctor visit, you'll pay 20% of what that exam costs. Only 30% of Americans know what coinsurance they're responsible for, but gathering that information will help you better budget for healthcare costs.
Don't be in the dark
Understanding your healthcare costs will make it easier to manage your money and avoid falling behind on medical bills. If you don't know any of the above information, call your insurance company or review your benefits online to get a better sense of those numbers. Doing so will not only help you plan better, but also help you avoid financial shocks when you inevitably need medical care.
