As you navigate your way around the world wide web looking for Arizona health insurance, there are things you should know in order to better help your understanding of this complicated market. Words like deductible, coinsurance, annual out-of-pocket maximum, copay, premium, HSA, and more should make at least basic sense before you submit that application. Arizona health insurance is complex and having a good broker is the best way to make sure you are fully aware of all the pros and cons in your decision.
The biggest factor in your Arizona health insurance is your annual out of pocket. So many people want to focus on the deductible, but honestly, your deductible is pointless if you have an 80/20 to $20,000. When you buy Arizona health insurance, you will always have a deductible and coinsurance. For our example, let’s assume a $2,500 deductible. Should you ever hit this deductible, then you need to satisfy your coinsurance. The best form of coinsurance is 100% and this means that the insurance company would now take over. However many people are familiar with 80/20’s and/or 70/30’s. For our example, let’s assume that your Arizona health insurance plan has an 80/20 to an additional $5,000. Based on our scenario thus far, you have a $2,500 deductible and if you ever hit that deductible you would start paying 20% of the bills until you spent an additional $5,000. This equals a total annual out of pocket of $7,500. This is a very average out of pocket for Arizona health insurance plans. If you have a 100% coinsurance with your $2,500 deductible, then your total out of pocket would be $2,500. If your 80/20 was a 70/30 and it was for an additional $3,000, instead of $5,000, then your total annual out of pocket would be $2,500 plus $3,000 which equals $5,500. Coinsurance is very simple and many people tend to overcomplicate the issue. Something else to keep in mind is that the coinsurance percentage is really irrelevant… 80/20, 70/30 or 50/50, if your out of pocket max is $3,000, then your max OOP is $3,000, the percentage doesn’t matter.
A common misconception about deductibles is that you get no benefit until the deductible is met. This couldn’t be further from the truth. All Arizona health insurance companies have preferred provider networks (also known as PPO’s). As long as you use a preferred provider when seeking care, you receive the insurance companies negotiated rate. It’s not uncommon for a $200 lab bill to be discounted to $10 or for a $175 doctor visit to be discounted to $60. These are real-world examples of the amount of money you would be responsible for before hitting your deductible. If you have already hit your deductible, then you’ll pay your coinsurance percentage. Assuming it’s 20%, you’ll pay 20% of that negotiated rate. Assuming it’s 100%, then your Arizona health insurance company would have already taken over and would be paying your bills for the remainder of the year.
Most Arizona health insurance plans are PPO’s these days, but a few Arizona carriers still have HMO’s available. The biggest difference between HMO’s and PPO’s is the ability to see specialists at will. With an HMO, your primary care physician must refer you to a specialist, often resulting in 2 copays. With a PPO, you are able to go straight to the specialist as long as they are a preferred provider for your Arizona health carrier.
The biggest advice any consumer could get is to use a broker. Use a broker that specializes in Arizona health insurance and a broker that works with every carrier in Arizona. An agent that only represents two carriers is more of an independent agent than a broker. A broker will always have your best interests at hand and will always be very knowledgeable about all Arizona health carriers.
Jesse Smedley is the Principal Broker for iHealthBrokers and the founder, president, and CEO of Smedley Insurance Group, Inc. and iHealthBrokers.com. Since the inception of SIG in 2007, Jesse has been dedicated to helping people save money on their health insurance by providing them with resources to educate themselves on all their health insurance options, both under age 65 and Medicare beneficiaries. He is featured in many publications as well as writes regularly for expert columns regarding health insurance and Medicare.