4 Terms I Wish I Understood When I Signed up for Health Insurance

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  • I have chosen a health insurance company with the lowest monthly premium.
  • I would have chosen a different plan if I had known what terms like deductible and coinsurance mean.
  • Next year I’ll weigh the pros and cons of a higher monthly payment versus a higher deductible.

I was 30 years old when I got my first full-time job at a company (that was here at Insider). Before that, I was a freelancer and dependent on Medi-Cal, California, for two years. Back in New York while working in the fashion industry, I worked at a startup that only offered an affordable health insurance option.

Working full-time at Insider, this was the first time I had to choose between different levels of health insurance. Even though I did my best to research my options, I still felt unprepared to make the decision. There are four terms I wish I knew before deciding on my current plan.

1. Off-Net Providers

Thanks to Medi-Cal I was able to find a physical therapist just 10 minutes drive from my house to help me prepare and recover from top surgery and I had no co-payment. My new health insurance through work is accepted nationwide, but I’ve found that there are more east coast providers in the network than west coast providers where I live.

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Turns out my physical therapist didn’t get my shiny new company job insurance, making him a service provider. I had to pay $125 per session out of pocket for my appointments.

2. Excess

After learning that my physiotherapist didn’t have a network, I called my insurance company to see what options I had for the future. If I wanted to keep going to my physical therapist, I would have to pay for the services out of my own pocket until I reached my deductible, which is the amount I’m responsible for until my insurance starts paying in.

To continue seeing the same physical therapist, I had to pay $125 per session until I reached my $1,000 deductible. Luckily I had an emergency savings fund dedicated to my major surgeries to cover those costs.

3. Coinsurance outside the network

After paying for eight $125 sessions, I reached my $1,000 deductible. For appointments after those eight sessions, I have been given a break from paying full price as I am now only responsible for paying off-network coinsurance. This means that I am responsible for 40% of the cost of the appointment and the insurance will cover the remaining 60%.

4. Out of Pocket Limit

The deductible limit of a health insurance plan is the amount I have to pay before the insurance covers 100% of the benefits. My plan has different deductible limits for off-network and on-network services.

My deductible limit for services outside of my network is $3,500 and includes any deductibles, co-payments, or coinsurance I paid for my physical therapy. Once the amount I paid for full price appointments and co-insurance reaches my deductible limit, the insurance will cover 100% of my off-network expenses.

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To be honest, I chose the health insurance I have because it offered the lowest monthly premium. Had I understood what those terms meant before I chose them, I would have weighed the pros and cons of a larger monthly bill to stay on Medi-Cal while recovering from my surgery, or health insurance for a lower one final price .

While my work health insurance premiums may have been lower, staying with Medi-Cal might have prevented me from paying over $3,000 in physical therapy bills in four months — sometimes I had to go to my physical therapist several times a week — out of pocket while recovering from surgery.

Now that I know better, I’m looking forward to choosing my health plan this year.

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