Cost Sharing in Health Insurance & Facets-Part II

Principal Stake holders of Cost Sharing:
1. Plan Sponsor
2. Plan holder or Policy Holder.
3. Business Team
4. Technical Team
5. Testing Team
6. Providers.

Typical Simple Scenario 1:

Individual Health Plan(Network Providers)

Plan Year:1-1-2016 to 12-1-2016

Plan Year Deductible: $1000

Coinsurance:50%-50%

Copay for Specialist visit: $100

Out-Of-Pocket Maximum:$2000

Special Note: Deductible, coinsurance, copay will be counted towards out-of-pocket amount.

1-1-2016: The plan-holder(patient) goes to  a specialist doctor. The doctor's allowable charge is $500 including copay. In this case, deductible amount will be $400. No coinsurance will be applied here. Out-of-pocket amount will be $500.

2-1-2016: The plan-holder(patient) goes to  another specialist doctor. The doctor's allowable charge is $400 including copay. In this case, deductible amount will be $300. No coinsurance will be applied here. Out-of-pocket amount will be $400.

3-1-2016: The plan-holder(patient) goes to another specialist doctor. The doctor's allowable charge is $400 including copayment. In this case, deductible amount will be $300. No coinsurance will be applied here. Out-of-pocket amount will be $400.

During these three visits total deductible amount will be $400 +$300+$300=$1000. So plan's deductible limit $1000 is met here. So from the 4th visit no deductible will be applied. Now plan will start paying as per contract. Total out-of-pocket for these three visits will be $500+ $400+$400=$1300

4-1-2016: The plan-holder(patient) goes to another specialist doctor. The doctor's allowable charge is $700 including copay. In this case, there will be no deductible. As coinsurance rate is 50%-50%, the insurance company will pay 50% of $600, that is, $300. This is known as benefit. This benefit will not be counted towards out-of-pocket.

The remaining 50% of $600, that is, $300 will be paid by the policy-holder.  In this visit, copay $100+coinsurance $300 , that is, $400 will be counted towards out-of-pocket amount.

Total out-of-pocket for these four visits will be $500+ $400+$400+$400=$1700.00

5-1-2016: The plan-holder(patient) goes to another specialist doctor. The doctor's allowable charge is $400 excluding copay. As coinsurance rate is 50%-50%, the insurance company will pay 50% of $400, that is, $200. This is known as benefit. This benefit will not be counted towards out-of-pocket. The remaining 50% of $400, that is, $200 will be paid by the policy-holder.  In this visit, copay $100+coinsurance $200, that is, $300 will be counted towards out-of-pocket amount.

Total out-of-pocket for these five visits will be $500+ $400+$400+$400+$300= $2000.00. As total out-of-pocket maximum limit of the health plan is $2000.00, so there will be no coinsurance for the next visits. The policy holder or patients will not spend any money from his pocket during this plan year.

6-1-2016: The plan-holder(patient) goes to another specialist doctor. The doctor's allowable charge is $400. As total out-of-pocket maximum limit $2000.00 is met in 5th visit, so the insurance company will pay 100% of the total cost, that is, $400.

Facets can make cost sharing calculations very accurately. You can check it manually. Enter claim data in facets and process the claim, facets will show you copay, deductible, coinsurance  and out-of-pocket as per the policy holder's health plan's covered benefits.