The costs of health care in an HMO or a PPO can be hard to understand. A health plan may sell different products with different benefits and costs. If you receive health insurance through an employer and you have a choice of health plans, ask the employer for information that compares the costs and benefits of the plans. Some health plans, and employers also have on-line tools and calculators to help you decide which plan is best for you.

Ask About Costs Before You Join a Health Plan

Talk to your employer or insurance broker, or call the plan.

• What is the monthly premium? (The amount that you or your employer pays each month.)
• What is the yearly deductible? (The yearly amount you pay for all or some services before the plan starts to pay.)
• Is there a separate deductible for different kinds of services? (For example one deductible amount for prescriptions and a different deductible amount for other medical services.)
• What costs (e.g. co-pays or coinsurance) or services (e.g. hospital, surgery) apply towards the deductible?
• What is the yearly out-of-pocket-maximum? (The total you have to pay each year for most of your covered services, excluding premiums. Each family member has a yearly out-of-pocket maximum. There is usually a family out-of-pocket-maximum. Be sure to ask how the out-of-pocket maximum is applied by the health plan.)
• Ask about what costs (e.g. co-pays, coinsurance, deductibles) apply towards the yearly out of pocket maximum?
• What is the co-pay or co-insurance that you pay when you have an office visit?
• What is the co-pay or co-insurance for prescription drugs?
• What is the co-pay or co-insurance for a hospital stay?
• What is the co-pay or co-insurance for an emergency room visit?
• Is there a limit on how much the plan will pay for prescription drugs in one year?
• Is there a limit on how much the plan will pay for medical care in one year?
• Is there a limit on how much the plan will pay for your medical care over your whole lifetime? (This is called a lifetime limit.)

You May Have to Pay the Whole Bill If:

• You see a specialist without a referral from your primary care doctor and prior approval from your medical group or health plan.
• You see a provider who is not in your health plan's network, unless it is an emergency or you have a referral and prior approval. The network is all the doctors, hospitals, and other providers from whom you can get care.
• You go to an emergency room for non-emergency care.
• You get care outside your health plan's service area, unless it is emergency or urgent care.
• You fill a prescription for a drug that is not on the health plan's list of approved drugs or you fill your prescription at a non-contracting pharmacy. (Check with your health plan’s website or member services for a list of contracting pharmacies.)
• You get services that are not part of your benefit package.

Questions and Answers

• What is a premium?
• What is a co-pay or co-insurance?
• What is a yearly deductible?
• How can I find out how much a service will cost if I have a high deductible?

What is a premium?

A premium is the amount you or your employer pays each month for your health insurance. If you get health insurance through your employer, you may pay part of the premium and your employer may pay part.

What is a co-pay or co-insurance?

These are the amounts you have to pay for a covered health care service or prescription. In some health plans, such as many HMOs, you pay a co-pay, which is a set amount, such as $10. In other plans, such as a PPO, you pay a co-insurance, which is a percent of the cost of the service, such as 30%.

What is a yearly deductible?

A yearly deductible is the amount you may have to pay for all or some covered health care services before your health plan starts to pay. Once you have met your yearly deductible, you pay a co-pay or co-insurance for covered services, and your health plan pays the rest. You may have different deductibles for different kinds of services. The yearly deductible starts over each year.

How can I find out how much a service will cost if I have a high deductible?

Ask your doctor, hospital, or other provider for the procedure code for the service you need. Then, call your health plan and ask the cost for this service. Some plans with high deductibles post the costs of common services on their websites.