How Deductibles & Co-Insurance Work
Deductibles, coinsurance, copays and out-of-pocket maximums are the basic elements to any health care plan. In short: you will first pay your deductible, then you will pay the percentage of coinsurance on your policy up to the out-of-pocket maximum, and then the plan will pay the rest of your costs for the remainder of the year.
A deductible is the amount that you pay for medical services before the plan begins to contribute toward expenses. In all of IU’s medical plans, you will pay 100% of the costs (at the “discounted” contracted rate) for medical services until you reach the deductible (except for in-network preventive medical services which are covered by the plan at 100%).
For the HDHP plans, all covered services, including prescriptions, are subject to the deductible except for wellness/preventive medical services and preventive prescriptions. For the $500 & $900 Deductible plans, the deductible applies to all covered services except emergency room and in-network urgent care center copays, preventive medical services, prescription drugs (except drugs administered in a Physician’s office), and transplants.
|2018 in-network deductibles|
|IU Health HDHP:||$2,500 employee only coverage
$5,000 all other coverage levels
|Anthem PPO HDHP:||$1,350 for employee only coverage
$2,700 all other coverage levels
|Anthem PPO $500:||$500 for employee only coverage
$1,500 all other coverage levels
If you have employee only medical coverage, then once you have enough expenses to meet the deductible, you move into the coinsurance phase of your coverage.
If you have employee and spouse, employee and child(ren) or family coverage level then the family deductible is structured differently based on the type of medical plan you are enrolled in – HDHP or Traditional Deductible plan.
High Deductible Health plans
(Anthem PPO HDHP and IU Health HDHP):
- With Family coverage, when one or more family members are covered, the entire family deductible must be met before services are covered for any member – there is no individual deductible for those enrolled in employee/spouse, employee/child(ren), or family coverage. The family deductible can be satisfied by the costs incurred by one or more family members.
Traditional Deductible plans
(Anthem PPO $500):
- With Family coverage, each covered person in a family has a separate, individual deductible (the employee only deductible level listed above) that they must meet during the year before the plan begins to share in the cost of services for that individual. Once each individual has incurred enough expenses to meet the individual deductible then they move to the coinsurance phase. However, when there are 3 or more covered family members, the deductible is considered met when the combined individual deductible expenses reach the ‘family’ maximum amount. Each enrollee may contribute no more than the amount of the individual deductible to the family maximum.
In addition to a deductible, health insurance also has coinsurance. Co-Insurance is the percentage of the costs that you share with the plan once you have met your deductible. Each of IU’s medical plans has your share of the coinsurance set at 20%. That means you will pay 20 percent and the plan will pay 80 percent of the costs for in-network services once the deductible has been met.
There is a completely separate deductible and coinsurance rate for the Anthem plans when out-of-network providers are used. The IU Health HDHP does not offer out-of-network benefits.
The Out-of-Pocket Maximum protects you from high medical bills. When the deductible amounts and coinsurance amounts equal the plan’s Out-of-Pocket Maximum then the plan pays 100% of covered charges for the remainder of the plan year.
|2016 in-network out-of-pocket maximums|
|IU Health HDHP:|| $3,000 for employee only coverage
$6,000 all other coverage levels
|Anthem PPO HDHP:|| $2,700 for employee only coverage
$5,400 all other coverage levels
|Anthem PPO $500:||$2,400 for employee only coverage
$7,200 all other coverage levels
Special Notes regarding Prescriptions:
For all Medical plans, there are some prescriptions as part of the Affordable Care Act (ACA) that are covered by the plan at 100%.
In addition, for the HDHP plans, there are other preventive medications that are allowed to bypass the deductible and are subject only to coinsurance. So for those preventive prescriptions, you only pay 20% of the cost for the medication. Download a list of examples of preventive medications or contact CVS Caremark directly at www.caremark.com or 1-866-234-6952.
The traditional medical plans (the $500 Deductible plan) have set copays for prescriptions. The copays for prescriptions are not applied toward the medical plan’s deductible, coinsurance, or out-of-pocket maximum. Retail and mail order prescription copays are based on a tiered drug list. In general, Tier 1 is generic drugs, Tier 2 is preferred brand drugs, and Tier 3 includes non-preferred drugs. There is a separate out-of-pocket maximum from the medical plan on in-network prescription copays.