Updated: Oct 24, 2018
The United States’ healthcare system is a complex maze complete with twists and turns. At WellAway, we want our members and affiliates to rest assured we are ready to help them navigate the system. Below, we feature Obamacare (Affordable Care Act), some basic differences in German vs U.S. healthcare and general insurance terms. With this jump off point, you are on your way to understanding the system, albeit this is just the beginning…
First things first… Let’s talk Obamacare (ACA)
What is Obamacare (also known as ACA or the Affordable Care Act)?
In the United States, groups are required to provide healthcare coverage or pay a tax penalty through the Affordable Care Act (ACA/Obamacare). Furthermore, the coverage must be compliant with rules called Minimum Essential Coverage (MEC). In late 2017, the United States Senate has repealed the mandate through a tax reform bill for individuals. Groups are still accountable to provide minimum insurance or face penalties in the United States.
Obamacare/ACA has made sweeping changes to the U.S. health care system and how individuals receive access and coverage for medical care. Many of the ACA’s health care reforms are primarily focused on reducing the uninsured population and decreasing costs.
How do I avoid group tax penalties?
As mentioned above, the act will penalize those groups (such as a German business operating in the U.S.) The rules still call for employers with 50+ full-time employees operating in the U.S. and/or full-time equivalents to continue offering medical coverage that is "affordable" and provides minimums essential coverage to at least 95% of their full-time employees and their children up to age 26.
Next… A Few Basic Terms You Should Know When Using Your Insurance Plan in the United States.
Health insurance can be a uniquely complex system to navigate all on its own. With proper guidance and support, you can find the perfect amount of coverage at the right price. At WellAway Limited, we are proud to provide the tools and knowledge needed for our members to find stability, health and security.
The industry has countless terms and vocabulary. We have chosen the top four terms that you should know. We want you to be informed, so you can choose a plan confidently and successfully. Deductibles, copayments, coinsurance and out-of-pocket maximums are ubiquitous in the healthcare world. Let’s get informed, together.
What is a copayment?
A copayment, also called a “copay” is a fixed amount that a patient pays for a service whose cost is covered by an insurance company. Sometimes referred to as “co-pays,” they are a specified dollar amount rather than a percentage of the bill, and they are usually paid at the time of service.
How do copayments work?
Let’s say a visit to your primary care physician costs $150 US, and your health plan features a $20 US copay for this service. This means that you pay $20 US and the insurance company that covers you pays the remaining allowable amount. Once you have reached your deductible, you will usually no longer be responsible for copayments. For certain plans and situations, you may be responsible for coinsurance until you reach your out-of-pocket maximum.
So, what is coinsurance?
Coinsurance is your share of costs on a covered healthcare service. Your share is calculated as a percentage (e.g. 20%) of the allowed amount for the service. These percentages differ depending on the chosen plan.
When do I pay coinsurance?
You start paying coinsurance after you’ve paid your plan’s deductible, if applicable. We encourage you to review your summary of benefits for details on which services require coinsurance.
For example, let’s say you visit a doctor because you have an eye infection. You have an insurance plan with a 20 percent coinsurance. That means your insurance company will pay for 80 percent of the total cost of the visit while you are left to pay the remaining 20 percent.
Coinsurance varies depending on the plan you have chosen.
What is a deductible?
The amount of money you pay in an insurance claim before the insurer starts paying you. Basically, it is the amount of money you are responsible for paying before you can claim the rest. When you buy insurance, you are protecting yourself against financial risks in the case of an emergency where you would get a huge bill from a hospital or other healthcare service provider.
The deductible is what you are responsible for before the insurer picks up the rest of the balance. This means that although you will have to pay for the services, the bill should never be higher than the deductible you chose.
WellAway Limited’s customer support can guide you through your coverage options to find the deductible that works for you.
How do deductibles work?
You purchase a plan with a $5,000 US deductible. Later that year, you contract an illness that forces you to call emergency services. The ambulance will rush you to the hospital and the doctors will treat you accordingly with an array of tests and treatments, you will make a complete and healthy recovery.
The price tag for this service could be up to $10,000 US. But with your deductible, you only pay $5,000 of that cost and your insurance company pays the remaining allowable charge.
What is “First Dollar Coverage”?
First dollar coverage in health insurance means that your insurance covers health care expenses without copayments or deductibles having to be paid first. It pays expenses beginning with the first dollar charged for health care or hospitalization depending on the type of policy purchased.
First dollar or base plans are not common and the premiums for such plans are generally more expensive than for a plan with deductibles and copayments.
What is an out-of-pocket maximum?
This one is simpler than it seems. It is the most you must spend for covered service each year. You will never have to pay more than this amount for your covered services. You add everything you paid for deductibles, copayments and coinsurance, once you have reached your out-of-pocket maximum, the insurance company picks up 100% of remaining costs that year.
How does an OOP (out-of-pocket) work?
You have a plan with a $1500 deductible and a 20% coinsurance, you are not only responsible for the $1500 out-of-pocket deductible, but you are responsible for 20% of the remaining bill as "out-of-pocket" costs.
That said, if you have a medical bill of $50,000 after a complicated surgery, you will be responsible for your deductible of $1500, and 20% of the remaining $48,500, or an additional $9700.
However, if your plan has an "out-of-pocket maximum" of $7000, then you do not pay one penny more than $7000 despite your coinsurance responsibility. The most you would pay in any medical circumstance is $7000 if your "out-of-pocket maximum" is $7000
Generally, plans with lower monthly payments (premiums) have higher out-of-pocket maximums.
Does every health insurance plan have an out-of-pocket maximum?
Plans vary greatly, depending on how much you are willing to pay each month. Some plans may have a very low maximum and charge a high premium monthly, others will have a high maximum and lower premiums. It all depends on the benefits and coverage you have agreed upon with your healthcare insurance provider, and your budget.
What is the difference between a deductible and an out-of-pocket maximum?
In addition to your monthly premium, your deductible is the amount of money you will pay out-of-pocket for covered medical expenses before your insurance company starts helping with costs. The amount the insurance company pays after you meet the deductible will depend on the coinsurance percentage you have chosen with your plan.
The out-of-pocket maximum is the maximum amount of your own money you will have to pay for care during the year. Think of the out-of-pocket limit as your deductible + coinsurance + copayments (if your plan has them) up to a total dollar amount. The only costs that don’t count toward your out-of-pocket limit are premiums, which you must continue paying to maintain your coverage.
A company such as WellAway Limited has 24/7 customer support to guide you through your coverage options. WellAway has plans for an array of different budgets and requirements, individuals, families, groups and more, internationally.
Finally, some useful products.
WellAway Limited’s ORBE product:
ORBE is a health and lifestyle solution that keeps you covered. Our members have the peace of mind knowing that they are always safe and secure, with a team ready to support and guide them in matters of health and well-being. ORBE provides health benefits, hospitalization and emergency coverage for continuous care and support to meet your needs with a $5 million USD annual limit. An array of preventive care services are included.
Wellaway Limited’s New American product:
The New American is a health & lifestyle product designed to meet the needs of individuals and families relocating to the USA. Needless struggle can be avoided by acquiring health benefits and access to medical services that are uniquely designed for your lifestyle abroad. We are committed to developing a robust support system for foreign nationals. Our ACA/Obamacare compliant product includes five plans to choose from and wellness tools that allow you to avoid the hassle associated with complying with USA healthcare requirements and avoiding tax penalties.
WellAway Limited’s customized group plans:
Whatever your goal is, security and health is essential. At WellAway we can customize a plan to suit your needs. We understand that finding the right set of benefits, for the right price can be challenging. In additional to our smart customizable plans, we provide complete protection additions such as Kidnap & Ransom, Terrorism, Disability and Complete Personnel Protection options!
Perfect coverage for:
· Schools and Facilities
· Marine Crews
· Missionary work
· Government | Embassies
· Youth Groups and Camps
WellAway Limited Company Highlights:
· Global Network of 650,000 Health Care Providers.
· Network of 180 Countries in Our Network.
· Global ConciergeCare Service & Support
· Emergency 24/7 Medical Assistance
· Evacuation and Repatriation
· Multi-Lingual Customer Service
· E-Consultations & Second Medical Opinions
· Competitive Prices
· Customizable Plans
In conclusion, this is just the “tip of the iceberg.” Unless you plan on working in the industry, it is important to surround yourself with the right companies and representatives to keep you safe and secure. When you find the right insurance plan for you, make sure you read the entire policy, ask the right professionals and research on your own. At the end of the day, your health is what matters most.