How Can I Know How Much a Procedure Will Cost Me?

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Calculating out-of-pocket costs can be confusing.  The two examples below illustrate how deductibles, copays, and coinsurance can translate into out-of-pocket costs for in-network and out-of-network providers.  Always make sure you verify your financial responsibility for a procedure with your plan prior to any procedure.

 

 

Calculating In-Network Costs

 

Let’s say your doctor recommends an MRI and you go to an in-network provider for the service.  The in-network provider has contracted with your insurer to perform the MRI for $1,000.  Your plan applies a $100 copay, a $200 in-network deductible, and 20% coinsurance for in-network providers.  You would owe:

 

   $200    for your deductible

+ $100    for your copay

+ $140    for your coinsurance (20% of the cost after the application of your deductible and copay:  $200 + $100 = $300.  $1000 - $300 = $700. $700 * 20% = $140.)

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   $440    out-of-pocket 

 

If you had already met your annual deductible, you would pay $280 out-of-pocket.

 

   $100    for your copay

+ $180    for your coinsurance (20% of the cost after the application of your deductible and copay:  $1000 - $100 = $900.  $900 * 20% = $180.)

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   $280    out-of-pocket

 

Calculating Out-Of-Network Costs

 

 

Let's say your doctor recommends an MRI and you go to an out-of-network provider for the service.*  The out-of-network provider charges $2,000 for an MRI and your insurer has set an MRI allowable amount of $1,000.  Your plan applies a $500 out-of-network deductible, a $100 copay, and 40% coinsurance for out-of-network providers.  You would owe:

 

     $500   for your deductible

+   $100   for your copay

+   $160   for your coinsurance (40% of the cost after the application of your deductible and copay: $500 + $100 = $600.  $1,000 - $600 = $400.  $400 * 40% = $160.)

+$1,000   for the amount beyond the allowed amount ($2,000 - $1,000 = $1,000.)

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$ 1,760 out-of-pocket

 

If you had already met your annual out-of-network deductible, you would owe $1,460 out-of-pocket.

 

     $100   for your copay

+   $360   for your coinsurance (40% of the cost after the application of your deductible and copay: $1000 - $100 = $900.  $900 * 40% = $360.)

+$1,000   for the amount beyond the allowed amount ($2,000 - $1,000 = $1,000.)

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$ 1,460 out-of-pocket

 

 

* For out-of-network procedures, first contact the doctor or hospital to find out the cost of the procedure.  Next, contact your insurer to find out what the allowed amount for the procedure is and what percentage you will be responsible for.  The allowed amount is the maximum reimbursement your health plan allows for a specific service. You will be responsible for any amount billed over the allowed amount.

 

 

 

 

I joined OPIC as a staff attorney in 2011.  I specialize in life, health, and disability insurance law.  I know that consumers can find themselves frustrated with these insurance issues at very difficult times in their lives—during sickness, after an injury, and after the loss of a loved one.  I am grateful that I can utilize my expertise to educate and empower insurance consumers as they navigate these challenges.