I have been working for a new company for a year now, and have been on their insurance through Aetna the entire time. It’s the first time I’ve had health insurance through work.. So I’m paying monthly out of my check for the health insurance, but then im still going to owe my health provider out of pocket at the end of the year if i don’t pile up enough medical bills?
In: Economics
You pay your insurance company a monthly membership fee called a premium in order to participate in the plan. Your insurance company specifies a dollar amount called a deductible; with certain exceptions*, you pay for all your own doctor’s bills until your cumulative medical spending hits that threshold.
At that point, your insurance company pays a percentage of all your medical bills going forward, and you pay the remainder; your share is called a co-pay.
Your insurance company also specifies a dollar amount called your out-of-pocket maximum. Once your cumulative spending hits that threshold, your insurance company pretty much covers all of your medical bills. Catastrophic illnesses and injuries can get expensive quickly and thus easily cause you to exceed that threshold, so that is where you get the most benefit from having insurance.
*Generally speaking, your preventative visits (like a yearly physical with your GP) are covered at 100% regardless of whether you’ve already crossed the deductible threshold. This was required by the Affordable Care Act; the theory is that if you’re getting preventative care regularly, you’re less likely to have an expensive issue pop up later.
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