Information on Family Health Insurance Coverage, Co-Payments & Medical Tests
Part 1: The Basic Tools, Chapter 2: Understanding the Language of Health Insurance Page 15
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Insurance policies that include family coverage -- coverage for dependents -- also often include a provision for a family deductible under the major medical portion of the policy. Although the details differ from policy to policy, the general concept of the family deductible is that once several individuals in a family have each met the individual deductible, all other family members are assumed to have met that deductible as well. At that point, the other family members receive coverage under the major medical provision beginning with their first medical bill of the year. However, even when the yearly deductible or the family deductible has been met in regard to major medical claims, you will still have to pay the co-payment or co-insurance.
Many insurance policies also include a provision for a yearly co-payment maximum. That limits co-payments for the year. Under the yearly co-payment maximum, once you have paid the co-payment for a predetermined level of medical bills -- between $2,000 and $5,000 in major medical bills during the year in many cases, depending on the policy -- all additional major medical claims are generally paid at the 100% rate.
However, payment at the 100% rate doesn't necessarily mean that the entire medical bill will be paid. Rather, it means that once you have met the yearly major medical co-payment maximum, the insurer will pay 100% of the UCR -- the Usual and Customary Rate -- for expenses covered by the policy. The UCR is generally determined by a statistical analysis of providers' charges for a particular procedure, in a specific geographic area.
That analysis is usually based on data collected by insurance companies in relation to charges for each type of medical test, service, or treatment. The data is entered into a computer database and is generally subdivided by state, geographic region, or ZIP code. Once the process has been completed and an array of charges has been established for a particular procedure, reimbursement in relation to claims is usually lim ited to the UCR, regardless of the actual amount of the medical provider's bill.
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