A Guide to Understanding Health Insurance 

Prior to buying health coverage, it is important that you learn and understand the basics of health insurance and how it works.

Use this guide, provided by Blue Cross and Blue Shield of Louisiana, to help you understand what health insurance is, as well as the following most common questions asked by individuals like you:

How Much Will You Pay Out of Your Pocket?

Your premium + your deductible + any coinsurance you must pay (up to your out-of-pocket maximum) + any copayments = the most you will pay for healthcare each year (for covered services).

Out-of-pocket maximums are typically between $1,000 for an individual and up to $11,000 for a family.  Once you reach the out-of-pocket maximum, insurance pays for 100 percent of your medical care (for covered services).

How you reach that out-of-pocket maximum is based on how much you pay for your medical care up front.  This depends on your deductible and coinsurance percentage.  The higher your deductible, the lower your monthly premiums will be, because you are willing to pay for some of your care up front.

It is important to understand that premiums are costs that you pay regardless of whether you use medical services. Deductibles only become expenses once they are incurred.


Understanding How Health Insurance Works

Let's say that you are in a serious accident. You've accumulated $50,000 in covered medical expenses.

A sample health insurance plan might offer:

  • Deductible: $5,000
  • Coinsurance: 20 percent
  • Out-of-pocket maximum: $6,000
    • In the example above, you would be responsible for the first $5,000 (your deductible).
    • After you pay your deductible of $5,000, you would be responsible for 20 percent coinsurance until you reach your out-of-pocket maximum of $6,000 (in this case, you would be responsible for another $1,000).
    • Your health insurance plan would pay the rest of the covered medical expenses (in this case, 80 percent).
    • After you reach your out-of-pocket maximum, you would pay nothing for any additional covered medical expenses for the rest of the plan year.

Deductible: The amount you're responsible for paying for covered medical expenses before your health insurance plan begins to pay for covered medical expenses each year.

Coinsurance: Shared costs between you and the health insurance plan. For example, you pay 20 percent of costs and your plan pays 80 percent. These percentages may be different from plan to plan. Some plans may not have coinsurance.

Copayment: The payment you make, usually a fixed dollar amount such as $15, each time you visit the doctor or fill a prescription medication. Not all plans have copayments.  These typically do not accumulate toward the deductible.

Out-of-pocket maximum: The most you will have to pay for covered medical expenses in a plan year through deductible and coinsurance before your insurance plan begins to pay 100 percent of covered medical expenses.


Learn How to Choose a Health Plan

There are many things to consider when choosing a health insurance plan. You want a plan that will meet your needs for types of coverage, access and dependability at a reasonable cost. Ask yourself the following questions to help steer your decision:

Do I want basic or more comprehensive coverage?
Some insurance plans (such as our BlueSelect®) offer basic coverage that protects your finances in the event of an illness or injury resulting in a hospital stay. These types of plans typically have a lower monthly premium, but you are responsible for doctor visits.

Other health insurance plans (such as our Blue Max) offer more doctor visits to include healthcare, maternity benefits, prescription drug benefits, eye care and routine doctor visits. These types of plans tend to have a higher monthly premium and may be more appropriate for those who may use their insurance benefits on a regular basis.

Is my doctor or hospital covered by the plan?
You need to check the insurance plan's network provider directory to confirm that your doctor or hospital is included in the plan's network. If you use doctors that are in the plan's network, you will receive the highest level of benefits.

Does the health insurance plan cover me if I travel?
Some plans have provider networks that are based on where you live. If you travel outside of that area, you are typically not covered by your health insurance plan. However, most of our plans include access to the BlueCard® and BlueCard Worldwide®; therefore, you may be covered almost anywhere you travel to in the United States and in 200 countries around the world.

Does the health insurance plan cover services that are important to me?
You must decide what services are important to you, such as preventive care and maternity coverage. Some plans do not cover these types of services; therefore, you may want to consider plans such as Blue Max that includes coverage for preventive services, as well as labor and delivery if you are planning a family.

Does the health insurance plan cover my family?
Make sure to purchase family coverage and not single-only coverage just for you if you need coverage for your family now or in the near future.

Does the plan work with a health savings account (HSA)?
Some high-deductible health insurance plans, such as our BlueSaver®, work with tax-favored health savings accounts that can be used to pay for certain qualified medical expenses. With our BlueSaver® coverage and an HSA established in a financial institution, your catastrophic needs are covered while you build a financial cushion for your later medical needs.

Are prescription drugs covered under my health insurance plan?
Prescription medication coverage varies by plan. Some of our plans require that you pay a copayment depending on the type of drug purchased, and we will pay the rest of the cost. Other health plans require that you must first meet your deductible before anything is paid.

Most drugs have a formulary, or list of drugs, that the plan covers. Find out if your medication is covered with a Blue Cross health insurance plan.

Does BCBSLA offer guidance to help me understand and determine my health coverage needs and selecting a plan for my family and me?
Yes. AskBlue is a personalized guide to healthcare coverage options. It will help you understand your needs and will suggest a plan family that will fit your needs and fall within your budget. 


How to Save on Healthcare Costs

Most everyone is looking for ways to cut down on costs whenever they can. There are ways to save on your healthcare expenses, too. Becoming familiar with your healthcare options may help keep you and your family healthier without breaking the bank.

  • Choose the right level of care

    When you need care, knowing your options can help save you time and money. When you choose the right level of care for your situation, it helps keep healthcare costs down and affordable for everyone.

    Below are some costs options (from lowest to highest):

    • No-cost -- Nurse advice line: Determine if your health insurance plan or doctor's office offers a nurse advice line. Some of these may even be available during nights and weekends.
    • $ -- Doctor's office: Offers a wide variety of services, from routine checkups to the diagnosis of a health condition.
    • $$ -- Urgent/after-hours center: These facilities handle many problems that can be treated in a doctor's office but are also available during non-business hours. They also offer some services not generally found in a doctor's office, such as X-rays and minor trauma rooms.
    • $$$ -- Emergency room: This should only be used for the most serious, life-threatening conditions, as it is the most expensive type of care.
  • Take advantage of resources to shop for care
  • The more you know about healthcare quality, safety, services and costs, the easier it is for you to choose wisely when it comes to the care that's right for you.

    Higher costs don't necessarily mean higher quality. High value is what's important when looking at healthcare. You can find care that's high-quality and high-value using online tools and resources.

    Below are some trusted sites that can help you understand you need when it comes to high-quality, high-value healthcare.

    Healthcare Advisor:  A tool available to our members that provides access to a wide array of medical information. Log in to your account to access Healthcare Advisor.

    Government/Business Sites:
    Louisiana Hospital Inform**: This is an online source for hospital pricing and quality offered by the Louisiana Hospital Association to help you choose the Louisiana hospital that best fits your needs.

    Hospital Compare***: This tool from Medicare provides information about a facility's quality of care based on patient surveys and allows you to view specific information and ratings based on certain medical conditions or surgical procedures.

    The Leapfrog Group: This online source provides you with quality reports for many hospitals nationwide and helps you reap the benefits of making smart, informed healthcare decisions.

Other Site:
Blue Distinction Centers®: You can compare the quality, and cost where available, of specific facilities (primarily hospitals) for common medical procedures, such as childbirths, tonsil removal, hip replacement, knee surgery, MRIs and colonoscopies.

Other Helpful Tips for Saving on Healthcare Costs:

  • Practice prevention. Get regular physical and dental check-ups, schedule recommended health screening tests and get your annual flu shot.
  • Take an active role in your care. Choose a primary care doctor to coordinate your care, and take time to build a good relationship with your doctor.
  • Keep the word "emergency" in emergency room. Seek help at an emergency room for deep wounds, chest pain, severe burns or serious trauma. If possible, visit an after-hours clinic or wait to see your own doctor.
  • Don't insist on an office visit or antibiotic prescription for a common cold.
  • Ask why tests and treatments are being done, if they are really necessary and what your options are.
  • Carefully review your doctor and hospital bills. Be on the lookout for duplicate billings, inaccurate dates and charges for supplies, medications or tests that you didn't receive.
  • Discuss prescription medications with your doctor. Ask if a generic drug or over-the-counter medication is appropriate for your condition.
  • Request samples when trying a new medication.
  • Avoid overuse of antibiotics. The Centers for Disease Control estimates that one third of the 150 million outpatient prescriptions for antibiotics written each year in the United States are unnecessary.
  • Take your medication as directed. Keep taking it and finish the prescription even if you feel better.

How to Plan Your Healthcare Budget

In considering what plan is appropriate for you, spend some time reviewing medical care you have received for the past few years. Use this amount to "estimate" your total costs for the year under the new plan. Add up your premium, anticipated deductible payments, coinsurance, copayments and other out-of-pocket expenses to make sure you can afford these costs.

You'll also want to think about the other services provided by the health insurance plan and the total value of the plan.


*Healthcare Advisor is powered by WebMD Health Services, an independent company that provides health coverage information for Blue Cross and Blue Shield of Louisiana and HMO Louisiana, Inc.

**Louisiana Hospital Inform is owned by the Louisiana Hospital Association, an independent nonprofit organization.

***Hospital Compare is a service of the U.S. Department of Health and Human Services.

 

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