This illustration is an example to help you understand basic healthcare costs and terms. Not all of these features may apply to your particular plan. Please review your plan's Evidence of Coverage and Health Services Agreement for specific details about your plan.
Blue Shield negotiates rates with providers and hospitals to give members a discount on covered services. You incur a $30,000 medical bill for the services you receive. The allowable amount (negotiated rate) is $20,000.
Let’s assume you have a health plan with a $1,000 deductible, a copay of $100 for an emergency room (ER) visit, 20% coinsurance for the hospital stay, and a $5,000 out-of-pocket maximum. (Please note that your monthly premium payments do not count toward your annual out-of-pocket maximum.)
First, you will pay your plan’s deductible, the amount you pay each calendar year for most covered services before Blue Shield begins to pay. In this example, your deductible is $1,000.
After you pay your deductible, then you pay your copay for your ER visit. The copay is the set dollar amount you pay for covered services after you meet any applicable deductible. In this example, your copay is $100.
After you pay your deductible and copay, you pay coinsurance for your hospital stay. Coinsurance is the percentage amount that you pay for benefits after you meet any applicable calendar-year deductible. In this example, you are responsible for 20% of your remaining allowable amount until you reach your $5,000 out-of-pocket maximum. Blue Shield pays 80%. (Hover over images for more details.)
You've now paid $4,880 ($1,000 deductible + $100 copay + $3,780 coinsurance) toward your $30,000 medical bill — just $120 shy of your $5,000 out-of-pocket maximum, the most that you would have to pay in one year toward deductible, copay and coinsurance amounts for covered services. Once you pay $120 toward a future bill, Blue Shield will pay 100% of allowed amounts for covered services from network providers for the rest of the year.
PPO members may have increased costs if they choose to use a doctor or hospital that is not in their plan's network; or if the service isn’t covered, they may be responsible for all billed charges.
HMO members are only covered for services if they see a provider in network except in the case of emergency treatment, or if a specialist for the care they need is not in their plan’s network, then their PCP will refer them to one outside the network.