How to Finance a Medical Emergency

An OppLoans E-Book

Opploans_Understanding-Insurance


Understanding your insurance.

If you have insurance, your provider will likely cover all or most of your medical expenses in case of emergency, but exactly how much you will have to pay out of pocket varies greatly from plan to plan. In general, you should make sure you know the basics of your individual plan, and take time to understand these three important insurance keywords:

A deductible is the amount of money you’re obligated to personally pay out of pocket every year for your medical expenses before your health insurance kicks in. for the health care services that you received. Once you meet your deductible, a deductible is met, your insurance carrier will begin repaying paying the remaining balance of a claim its share of your remaining balance. For example, if your insurance plan has a $2,000 deductible, in the case of an accident or medical emergency, you will need to pay for $2,000 worth of services out of pocket before your insurance company will cover the rest. If you get a hospital bill of $12,000, you will pay for $2,000 of that, and your insurance company will pay the remaining $10,000. After that, any other medical expenses you rack up throughout the year will (probably) be covered by your insurance company.

Depending on what kind of insurance you have, your deductible can range from $0 to many thousands.

A copayment, which is often referred to as a “copay,” is a – typically small – fixed amount of money that you’re required to pay your insurance company whenever you go to the doctor. If your health care plan has a $20 copayment, you will pay $20 upfront before being examined or treated by a medical professional. Depending on your plan, your copayment amount will often vary for different services. Seeing your primary care doctor might be $20, but if you have to see a specialist, you might pay $40, and a trip to the emergency room might cost $100. It all depends on what kind of insurance coverage you have.

Coinsurance is a co-sharing agreement between you and your insurer, which is typically based on a set percentage and used in conjunction with a deductible. Essentially, it works like this: your insurance company might agree to cover 80 percent of your medical costs, provided you pay the remaining 20 percent of the balance. Basically, coinsurance is designed to split or spread the cost of your medical treatment among multiple parties. 5

Can you purchase health insurance after an emergency?

In general, the answer is “no.” But NPR reports that “there is one important exception.” As previously mentioned, Medicaid has strict eligibility requirements that differ among each one of the 50 states in America, and “if someone lives in a state that has expanded Medicaid coverage to people with incomes up to 138 percent of the poverty level (currently $16,105 for an individual), enrollment would generally be retroactive to the first day of the month that the person applied for coverage. In addition, if someone was eligible for Medicaid during the three months preceding the application, medical care received during that time could be covered as well.” 5

If you recently lost insurance you had through a workplace, you could also be eligible for COBRA, a government provision that allows you to stay on your employer’s insurance, so long as you pay the entire premium yourself. 6 Even if you waive COBRA coverage initially, in the event of an emergency, you can elect to retroactively enroll in this coverage up to six months after leaving your previous employer. You’ll have to pay upfront for all the missed monthly premiums, but this might less expensive than having to pay out of pocket for all your medical bills.

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